Crop Insurance Today - 20

Figure 17 2016 Crop-Hail Premium and Loss Ratios
All Crops, Perils, Plans Combined

[Information sources for this section include:
NCIS' Insured Crop Summary and claim files.]

Canadian Crop-Hail
Experience

Crop-Hail business in Canada is primarily
written in the prairie provinces of Alberta, Manitoba, and Saskatchewan. Denoting Canadian dollars with C$, Table 9 presents the totals by year.
Overall, the 2016 loss experience deteriorated
from 2015. The 2016 loss ratio was 0.85 as compared to the 2015 loss ratio of 0.61. Losses paid
to farmers climbed from C$167 in 2015 to C$256
million in 2016, while the number of claims increased from 13,222 in 2015 to 19,863 in 2016.
The average claim in 2016 was C$12,907, up from

C$12,630 in 2015. On the positive side, Crop-Hail
premiums increased from C$274 million in 2015
to C$302 million in 2016.
For the individual provinces, Saskatchewan
had C$176 million in premium in 2016, 58 percent of the total; Alberta had almost C$79 million,
or 26 percent; and Manitoba had just under C$47
million, or 16 percent. Premiums for the year increased by 13 percent in Saskatchewan, 5 percent
in Alberta, and 12 percent in Manitoba, for an
overall increase of 10 percent.
Total payouts for the year in Alberta were reported at more than C$65 million, well above the
C$50 million paid in 2015, but much less than the
C$99 million paid out in 2014. The 2016 loss ratio
was 81.9 percent, as compared to 66.4 percent in

Table 9 Canadian Crop-Hail Results, All Perils

CROP YEAR

PREMIUM

LOSSES

Mil. C$

2008
2009
20102
20112
2012
2013
2014
2015
2016

289
262
263
269
341
344
316
274
302

341
76
155
164
280
172
249
167
256

NUMBER OF CLAIMS

LOSS RATIO1

29,000
4,075
16,000
15,000
21,600
13,221
13,372
13,222
19,863

1.18
0.29
0.59
0.61
0.82
0.50
0.79
0.61
0.85

Loss ratios do not reflect loss adjustment costs.
Number of claims exceeded value indicated.
Source: The Hail Report, a publication sponsored by The Canadian Hail Association, which represents companies that sell crop-hail
insurance in Western Canada including subsequent updates.
1
2

MAY2017

2015. Wet weather and standing water in certain
areas resulted in delays in harvesting the crop.
Yields were 25 to 30 percent above the yields reported in 2015, but crop quality has declined in
certain regions.
Manitoba once again had a difficult year despite the increase in premium. Payouts were
slightly below C$67 million for a loss ratio of
142.9 percent as compared to a loss ratio of 108.6
percent in 2015. Storms resulting in hail damage
were reported during the Labour Day weekend,
followed by other storms in the third week of September and early October.
In Saskatchewan, payouts increased to nearly
C$125 million, up from of C$71 million in 2015.
The loss ratio increased to 70.9 percent versus a
loss ratio of 45.6 percent in the prior year. The
C$20 million increase in premium for the year
blunted a portion of the C$54 million increase in
loss payments. Most of the hail damage was from
storms that occurred in July, with many producers
affected by more than one storm.
[The information source for this section was The
Hail Report, a publication sponsored by the Canadian Crop Hail Association, including subsequent
updates. The Hail Report is produced every two
weeks during the hail season.]

Conclusion

Again this year, crop insurance helped farmers
deal with the year's weather and market risks. The
public-private partnership worked as envisioned
in 2016. Famers shared in the cost of the program
by paying premiums of $3.5 billion and incurring
losses through deductibles before any claims were
paid. Insurance companies effectively sold and
serviced more than 1.2 million policies, accurately
determined losses and paid claims on more than
218,000 policies, experiencing a much-improved
year following down years in three of the last four.
The Federal government provided premium support to ensure widespread coverage and avoidance of any Congressional action in the form of
ad hoc disaster assistance.
Looking to the future, the American public is
assured that crop insurance will be in place to provide financial stability for the many small, family
farms that comprise the core of U.S. production
agriculture. Crop insurance will ensure that when
the repeated disasters of recent years strike again,
as they most assuredly will, U.S. farmers will be
able to bounce back to produce again at high levels the food, feed, fiber and energy crops on which
the U.S. and world population have come to expect and depend.

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