Crop Insurance Today Second Quarter 2023 - 30

The industry loss ratio, defined as paid losses
divided by premium written, was 0.83 in 2022,
up from 0.79 in 2021, but down from 2020's 1.14.
There were eleven storm days that exceeded
$20 million of loss in 2022. The most significant
storm occurred on June 7 causing $203 million
in Crop-Hail losses with $191.3 million of that
occurring in Nebraska alone. Four storms in
June caused more than $336 million in damage
across 23 different states. Five storm days in
July caused more than $185 million in damage.
In total, the losses from the top 10 storm days
in 2022 amounted to $541 million, up significantly
from $393 million in 2021, and on par
with 2020's $570 million. Five states took the
brunt (93%) of the damage caused on the ten
largest storm dates, with Nebraska absorbing
$399.3 million of loss, South Dakota $30.2 million,
Iowa $29.7 million, Minnesota $23.4, and
North Dakota $22.0 million.
Crop-Hail loss ratios by state are shown in
Figure 15. Colors identify states with similar
loss ratios, while shading is used to identify
states with similar premium volume. Crop-Hail
insurance was purchased in 42 states in 2022.
Of these, eight states had loss ratios greater than
1.00 and are shown in shades from yellow to red
on the map. Arizona had the highest loss ratio
at 1.83, followed closely by Montana with 1.59.
The top five states by premium volume-
Nebraska, Iowa, Minnesota, Illinois, and North
Dakota-experienced loss ratios of 1.49, 0.38,
0.41, 0.56, and 0.51, respectively. Overall, 23 of
the 42 states with premium had loss ratios of
0.50 or less, shown in dark green on the map.
Six states, shown in medium green, had loss
ratios between 0.50 and 0.75, and five states,
shown in light green, 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 set yet another record
with nearly $10 billion in crop hail coverage, a
20 percent increase over last year (Table 8). Producers
who waited to purchase hail coverage
late in 2022 likely had a problem finding it due
30 SECONDQUARTER2023
Figure 15
2022 Crop-Hail Premium and Loss Ratios
National Centers for
Environmental
Information
Data as of July 5, 2023, All Perils
Source: National Crop Insurance Services Insured Crop Summary and NCIS6b
to the unanticipated demand. With continued
strong crop pricing, combined with increasing
input costs, rising fuel costs and record inflation,
producers increased record crop hail coverages
to ensure adequate coverage was placed
on their crops.
Claim activity was at or slightly below the
five-year average. Producer premiums totaled
$265 million, which was slightly above the fiveyear
average. This resulted in an industry loss
ratio of 71 percent, down from last year but still
a significant impact on participating companies.
Prairie farmers faced mixed
conditions at the beginning of
the season
Alberta seeding and conditions were at or
near normal despite the south being persistently
dry through the winter. Timely rains helped
progress crops.
Saskatchewan had an early start in the south
and west portions of the province with drought
like conditions still a concern along the west
corridor. The dry conditions provided some
impact on crop production. The east side of
the province battled a cool damp spring hampering
and delaying early seeding progress. A
dry fall season helped to ensure that all crops
were harvested. Overall crop reports indicate
an average to above average production year for
most producers.
After a record dry 2021, Manitoba had a very
wet start to the 2022 growing season. Saturated
soils delayed seeding by up to four weeks in parts
of the province. A warm and moderate summer
allowed most crops to catch up to near normal
development. Harvest rain caused some delays
and extending harvest beyond the average.
Storm frequency was below average in 2022.
The number of days producing active weather
was below average for most provinces. With the
record coverage, the cost per claim quickly built
like the clouds that cause the hail. What appears
to have been an average season for storms and
claims endured record high claim payments.
Manitoba's average claim was 20 percent
higher than the 5-year average. Saskatchewan's
average claim was 45 percent higher and Alberta
was 41 percent higher.
2022 received fewer than average storm days
throughout the summer, but the cost per claim
made up for the decrease in storm days. June
was the only month that provided more storm
day activity than the average across much of the
prairies. With June more active than normal,
the year overall ended up with about 20 percent
less active days from the five-year average.
The hardest hit was Alberta with an industry
loss ratio of 98 percent compared to 2021's
97 percent. Saskatchewan followed with a 68
percent loss ratio, compared to 133 percent in
2021. Manitoba reported a 43 percent loss ratio
compared to 21 percent in 2021.
http://www.CropInsuranceInCanada.org
Crop Insurance Today Second Quarter 2023

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