Crop Insurance Today Second Quarter 2022 - 28

Figure 14
2021 Crop-Hail Premium and Loss Ratios
prairie producers totaled more than $322 million-an
amount not seen since 2008. Producer
premiums totaled more than $309 million for
an industry loss ratio of 104 percent (Table 8).
This loss will impact the balance sheet of most
participating companies.
Prairie farmers were optimistic when the
Premium
000 - 1,000,000
1,000,000 - 10,000,000
10,000,000 - 25,000,000
25,000,000 - 50,000,000
50,000,000 - 75,000,000
75,000,000 - 100,000,000
100,000,000 - 200,000,000
200,000,000 - 302,000,000
Data as of April 24, 2022, All Perils
Source: National Crop Insurance Services Insured Crop Summary and NCIS6b
National Centers for
Environmental
Information
Mon Dec 6, 2021
Loss Ratio
0 - 50%
50 - 75%
75 - 100%
100 - 125%
125 - 150%
seed went in the ground and it was time to
purchase their crop hail insurance coverage.
But dry conditions were widespread across the
western prairies and there were concerns going
into the season aſter minimal fall moisture and
little snow cover. But some timely early spring
snow and rains brightened the outlook for seeding
and provided hope.
Record dry was reported through southern
Crop-Hail loss ratios by state are shown in
Figure 14. Colors identify states with similar loss
ratios, while shading is used to identify states
with similar premium volume. Crop-Hail insurance
was purchased in 43 states in 2020. Of these,
only three had loss ratios greater than 1.00 and
are shown in red and orange on the map. Illinois
had the highest loss ratio of 1.4, followed closely
by New Mexico at 1.31.
The top five states by premium volume-Nebraska,
Minnesota, Iowa, Illinois, and North Dakota-experienced
loss ratios of 0.87, 0.82, 0.65,
1.4, and 0.66, respectively. Overall, 24 of the 43
states with premium had loss ratios of 0.50 or
less, shown in dark green on the map. Six states,
shown in light green, had loss ratios between 0.50
in lig
t
Table 8
able
Canadian Crop-Hail Results, All Perils
anadian
Crop Year
2012
op Y
2013
2014
2015
2016
2017
2018
2019
2020
2021
Premium
Mil. $
341
344
316
274
302
286
270
264
301
310
1 Loss ratios do not reflect loss adjustment costs
Data as of November 30, 2021
Source: Canadian Hail Association
28 SECONDQUARTER2022
Losses
Mil. $
280
172
249
167
269
97
171
247
193
323
Number of Claims
Mil. $
21,600
13,321
13,372
13,222
20,325
8,633
11,709
16,367
12,137
12,092
Loss Ratio1
0.82
0.50
0.79
0.61
0.89
0.34
0.63
0.94
0.64
1.04
and 0.75, and 10 states, shown in yellow, had loss
ratios falling between 0.75 and 1.00.
[Information sources for this section include:
NCIS' Insured Crop Summary and claim files.]
Canadian Crop-Hail
Experience
This section of the report was prepared by
the Canadian Crop-Hail Association. It can be
found on their website: www.CropInsuranceInCanada.org.
The
crop hail industry paid out near record
payments on the prairies for 2021. Recording
more than 12,000 claims, industry payments to
Manitoba and a large portion of southern and
western Saskatchewan, as well as southern Alberta.
The weather dried out quickly and, with
little to no reserve moisture and record heat,
crops soon started to suffer. By July hopes were
dashed as extreme heat and drought like conditions
across much of the prairies resulted in
plummeting yields. The hot and dry conditions
made way for an early start to harvest with
grain prices remained at near or record levels
throughout the summer and into harvest.
The industry set record-level sums insured of
more than $8 billion as crop prices surged and
spring looked promising. Producers continued
to welcome industry rate declines in what continues
to be a very competitive marketplace.
Storm frequency was below average in 2021.
The number of days producing active weather
fell below the five-year average. Storm severity,
or the cost per claim quickly built like the
clouds that caused the hail. What looked to be
an average storm season produced record high
claim payments. All three prairie provinces
had average cost per claims higher than the
five-year average. The industry saw record loss
payments from the activity with storm severity
(average per claim) up 78 percent compared to
the five-year average.
With the lack of moisture, the western
prairies received less-than-average storm days
throughout
the summer, but storm severity
made up for the decrease in storm days. The
summer started off slow with June seeing storm
activity down 25 percent from the five-year average.
July continued with limited active weather.
However, the limited storms produced in
July were the start to what was to become an
expensive claim season.
Hardest hit was Saskatchewan with an indus
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