Crop Insurance Today June 2018 - 23

The top five premium volume states, Nebraska,
Iowa, Minnesota, Illinois, and North Dakota,
had loss ratios of 1.24, 0.59, 1.09, 0.54, and 1.05,
respectively. Overall, 22 of the 42 states had
loss ratios of 0.50 or less, shown in pink and
yellow on the map. Six additional states, shown
in green, had loss ratios between 0.50 and 0.75,
while no states had loss ranges falling between
0.75 and 1.00.
[Information sources for this section include:
NCIS' Insured Crop Summary and claim files.]

Figure 18 2017 Crop-Hail Premium and Loss Ratios
All Crop, Perils, Plans Combined

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 8 presents the
totals by year. Overall premiums for Canada
declined from C$302 million in 2016 to C$286
million in 2017, some of which might be attributed to the 9 percent reduction in the number of policies written for the year. Loss experience improved enormously, with losses paid
to farmers declining to C$97 million in 2017
from C$269 in 2016. The number of claims
dropped precipitously to 8,633 from 20,325
in the prior year, while the average claim size
declined to C$11,209 from C$13,325 in 2016.
Overall, the loss ratio for the three Canadian
provinces was 0.34, second only to the loss ratio of 0.29 in 2009, and a significant improvement over the loss ratio of 0.85 in 2016.
For the individual provinces, Manitoba saw
an increase in premium of 7 percent, to C$50
million, while Saskatchewan and Alberta saws
reductions of nine and 4 percent, respectively.
Policy counts were down in all three provinces, with reductions of 2 percent in Manitoba,
9 percent in Saskatchewan, and 15 percent in
Alberta.
Total payouts for the year in Manitoba were
C$23 million, roughly one-third of the C$74
million paid in 2016. The loss ratio fell to 0.46
from 1.59 percent a year ago. Losses for Saskatchewan decreased from C$129 million in
2016 to C$48 million in 2017, resulting in an
improvement in the loss ratio from 0.73 to 0.30.
Payouts also fell substantially in Alberta, from
C$65 million in 2016 to C$25 million this year,
with the loss ratio falling from 0.84 to 0.34.
[The information source for this section was
the Canadian Crop Hail Association.]

Data ss of April 23, 2018
Source: National Crop Insurance Services Insured Crop Summary and NCIS6b

CONCLUSION

In 2017 Federal crop insurance provided a much-needed risk management tool to
American farmers and ranchers in a year of
highlighted by localized catastrophic weather events that remind us what a risky business
farming and ranching is. Farmers paid more
than $3.7 billion to buy 1.125 million policies.
The companies assessed losses and paid claims
on more than 302,000 policies. The low level of
farm income continues and weighs heavily on
all of agriculture, and while cases of severe or
catastrophic loss were limited, for those areas

where disaster struck, Federal crop insurance
provided much needed assistance, helping with
their journey to recovery. The crop insurance
industry continues to provide an effective and
affordable risk management tool for U.S. agriculture, but it will face challenges in the coming year as policy makers craft a new farm bill.
Hopefully the partnership between the Federal
government and the private insurance companies will be able to remain the solid foundation
for financial stability that is needed for farmers
and ranchers across the diverse landscape that
is U.S. agriculture.

Table 8 Canadian Crop-Hail Results, All Perils

CROP YEAR

PREMIUM

LOSSES

Mil. C$

2008
2009
20102
20112
2012
2013
2014
2015
2016
2017

NUMBER OF CLAIMS

289 341
262 76
263 155
269 164
341 280
344 172
316 249
274 167
302 269
286 97

LOSS RATIO1

29,000
4,075
16,000
15,000
21,600
13,321
13,372
13,222
20,325
8,633

1.18
0.29
0.59
0.61
0.82
0.50
0.79
0.61
0.89
0.34

Loss ratios do not reflect loss adjustment costs.
Number of claims exceeded value indicated.
Data as of November 20, 2017
Source: The Canadian Hail Association
1
2

CROPINSURANCE TODAY®

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