Financial and insurance industries adjust to help ag through pandemic

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By Craig W. Anderson

The financial and insurance industries didn’t escape the negative effects of the COVID pandemic. But each hammered out solutions that kept them in touch with their agricultural clientele while at the same time using technology to enhance their services.

“Banks, like all other businesses, instituted new protocols to protect customers and their own staff,” said San Joaquin Farm Bureau Executive Director Bruce Blodgett. “Remote banking, appointments, masking, social distancing, it all combined to help them keep serving their customers.”

While the ag supply chain continued functioning, Blodgett said the financial and insurance sectors, like farmers, dairy operations and ranchers, had to deal with a host of issues while still maintaining a one-on-one relationship with customers.

“We’ve made it through a pandemic, drought, supply chain interruptions, a freeze affecting walnuts and maybe smoke affecting wine grapes again,” he said.

“Everything was fine with our banking needs,” said SJFB First Vice President Andrew Watkins. “I think the preventive methods used by banks, insurers and all businesses encouraged them to pursue online methods in all aspects of their businesses.”

Will the changes forced on agriculture and those businesses that support it in San Joaquin County – where the value of agriculture to the economy exceeds $2.6 billion, according to the 2019 Agricultural Commissioner’s annual crop report – remain after the pandemic has eased?

The pandemic caused banks worldwide to adapt and adopt policies that would work during the COVID crisis and after it has passed. Daniel Meza, vice president, relationship manager for Lodi-based Farmers and Merchants Bank said, “The challenge when the pandemic first hit was to deal with the ‘shelter in place’ mandate. People were nervous about the banking system.”

He said F&M remained open; when other banks closed branches and sent customer to ATM’s to do their banking, “Our CEO felt it was important to maintain business hours and keeping bank staff and customers safe by observing all the COVID-caused safety mandates.”

“We had to help all of our customers, especially agriculture; ag is essential and so are we to ag. We worked long hours to help people continue to do business.”

“Foot traffic was down in branches, more touchless transactions were done, business was conducted via the internet or phone and there were a lot of Zoom and GoTo Meetings,” said Paul Haley, EVP and chief lending officer for BAC Community Bank in Stockton. “We didn’t close branches for significant lengths of time and our customers understood. People wanted face-to-face business relationships and they appreciated how we were handling our banking.”

He said that, like many small and large businesses, banking had to make changes to maintain the individualized, in person milieu in the post-pandemic business world.

“Banking, insurance and other industries have been moving more to working online and we were set up for this revolution before 2020,” said SJBF President David Strecker of agriculture’s increasing use of cutting edge technology. “But the unknown aspects of the future are a concern.” He noted the pandemic, drought, wildfires as being “very frustrating” because “the state Legislature is always reactive instead of being proactive about taking care of obvious problem situations” at a state government level.

Streamlined banking and insurance at least can lighten the angst of doing business but in these still-troubling times challenges remain.

“The pandemic changed the way we had to work,” said Karen Sanguinetti, owner of Sanguinetti & Co. Insurance Brokers in Stockton, about what her firm did to keep working. “Employees only were allowed inside, clients could visit only in the conference room, and we would meet clients outside in a designated area. We’ve done, and continue to do, all possible to keep our employees and clients safe.”

It was a case of trial and error, she said, about how to do business in the middle of a pandemic but one aspect that seems to cross all boundaries of business is that “our clients are very understanding and patient about our, and their, situation.”

Sanguinetti commented that about half of her employees opted to work at home and returned to the office after nearly two months to resume activities in the brick and mortar location.

“Your employees are here for you and you have to be here for them,” she said. “And we’re all looking forward to that time in the future when we’ll return to normal.”

Jake Samuel, custom harvester and grower in the Linden area said, “We were pushed to become remote customers and some issues were more difficult to do in that way, such as workman’s comp and liability insurance. On the other hand we’ve been notified regarding COVID cases and other important issues.”

He said banks seem eager to lend money but now “we’re feeling the pandemic effects in that it takes more time for documentation but a lot more business is done online, there are payment options and overall, this has been streamlined due to improved technology.”

Now all businesses associated with agriculture are playing catch-up, making up for industry slowdowns in manufacturing equipment, replacement parts and everything needed to restore the supply chain to its pre-pandemic efficiency. “It’s taking time and there’s no end in sight,” Samuel remarked.

Financial planning, important to agriculture, is likely to change forever, say banking industry experts, because clients will expect more options when working with planners remotely, according to Investment Executive, a research/consulting firm. Financial planning is expected to evolve beyond a static piece of paper into a “dynamic document that is constantly updated and adjusted.”

“The pandemic brought many challenges,” said John Primasing, vice president, chief credit officer of Bank of Stockton. “The bank is very understanding regarding our clients situations.”

He said Bank of Stockton keeps abreast of what’s happening in the commodity realm and “we work with our grower clients on budgets and forecasts. The bank is well connected with agriculture industry people, we utilize a lot of public information and we put it together for our clients. Ours is a relationship-driven business and we all know each other well.”

Primasing explained that ag labor remains “a big, big problem” and trucking is also struggling to find qualified drivers. “The stimulus money and school shutdowns had, and still have, people staying home on the government’s money instead of returning to the workforce.”

Pent-up demand from the supply chain being negatively affected has caused backlogs that are being resolved slowly due to labor, transportation and other issues which cause problems for businesses in keeping up with loan payments, Primasing said. “The Bank of Stockton is very understanding about what our clients have to deal with. We offer payment deferments of three, six and nine months, we are flexible and we work with clients.”

“The key is customer service,” F&M’s Meza said. “Of course, being local and well connected with farmers, processors, labor and an understanding of the marketplace, dealing with the impacts of drought, wildfires and regulations, informs every aspect of our ag business,” said Meza, adding that a “strong relationship with Farm Bureau” is a valuable asset.