Crop Insurance Today Second Quarter 2019 - 19

2018 MPCI Premium and Loss Ratios
Figure 15. 2018 MPCI Premium and Loss Ratios
Figure 13 All Plans Compined
All Plans Combined

LR

Premium

(0.00-.50)

(0-10,000,000)

(.50-.75)
(.75-1.00)
(1.00-1.25)

(10,000,000-100,000,000)
(100,000,000-250,000,000)

Data as of April 16, 2019

(250,000,000-500,000,000)

(1.25-1.50)

(500,000,000-1,200,000,000)

Source: RMA Summary of Business

(1.50-3.00)

Data as of April 16, 2019 Source: RMA Summary of Business

Figure 14 State Loss Ratios
Figurefor
16.2018
State Loss Ratios for 2018
Loss Ratio

3.00
2.50

Revenue Plans (RP, RPHPE)
Yield Plan (YP)

2.00
1.50
1.00
0.50
0.00

AK
AL
AR
AZ
CA
CO
CT
DE
FL
GA
IA
ID
IL
IN
KS
KY
LA
MA
MD
ME
MI
MN
MO
MS
MT
NC
ND
NE
NH
NJ
NM
NV
NY
OH
OK
OR
PA
RI
SC
SD
TN
TX
UT
VA
VT
WA
WI
WV
WY
US

As was the case in 2017, Texas generated the
largest amount of premium at $1,153.8 million,
and the largest indemnities of any state, with loss
payments of $1,518.2 million (Table 6), corresponding to a loss ratio of 132 percent. Drought
accounted for roughly 60 percent of crop damage in Texas. Minnesota was second highest in
terms of indemnities paid, but seventh in premium volume, producing an overall loss ratio of
62 percent. North Carolina ranked third largest
for indemnity payments and had a very high loss
ratio at 175 percent, precipitated by Hurricane
Florence (Map 1), which caused $113 million
of insured crop damage. Florida had the fourth
largest loss and the highest loss ratio of any state
at 288 percent. The state was affected not only by
tropical storm Gordon (Map 2) during the first
week of September, which caused $192 million of
damage, but also by the category five Hurricane
Michael (Map 3) on October 10, which caused
relatively modest insured crop loss of $24 million
in Florida. Georgia suffered most of the insured
crop damage inflicted by Michael at $212 million. Rounding out the top five largest loss states
was Kansas, roughly 60 percent of thosee losses
caused by drought.
Figure 13 shows a map of state loss ratios and
premium volumes for 2018. Colors are used to
identify states with similar loss ratios, and shading is used to identify states with similar premium volumes. Three states, Florida, Georgia,
and North Carolina, had loss ratios exceeding
150 percent. The eight other states with loss ratios above 100 percent included Texas, Nevada,
Rhode Island, Utah, Arizona, New Mexico, South
Carolina, and Oklahoma. Of these, only Arizona
and Oklahoma had premiums of $100 million
or more. Total indemnities for these eight states
totaled $3,037 million, 45 percent of the overall
U.S. payout. The five states with the lowest loss
ratio states were, in order, Illinois at 0.15, Indiana
at 0.20, Ohio at 0.22, Maine at 0.29, and Washington at 0.30. Of the 25 crops having the largest
premium volume, the highest loss ratios were for
flue cured tobacco, 3.13; annual forage, 1.75; cotton, 1.25; peanuts, 1.00, and dry peas, 0.98.
Figure 14 shows loss ratios by state for the
yield plan (YP) and the revenue plans (RP and
RP-HPE combined). Revenue plan loss ratios
tended to be greater than those for the yield plan
in most states during 2018. Of the 49 states with
premium, the revenue plan loss ratio exceeded
the yield plan loss ratio in 31. States where the
difference exceeded 20 percentage points include:

Data as of April 16, 2019
Data as of April 16, 2019 Source: RMA Summary of Business
Source: RMA Summary of Business

Alaska, California, Connecticut, Florida, Georgia,
Maine, Michigan, Missouri, North Carolina, and
Vermont. These states jointly contributed $656
million of revenue plan premium and $78 million
of yield plan premium to the program. In comparison, the yield plan loss ratio exceeded the revenue plan loss ratio in 17 states, seven of which
had a difference of 20 points or more. These states
jointly contributed $95 million of revenue plan
premium and $25 million of yield plan premium
to the program. Rhode Island had no revenue plan
premium. On a countrywide basis, both plans had
underwriting gains, with a loss ratio of 0.62 for

the revenue plans and 0.80 for the yield plan. The
primary states for yield protection business included Texas, Montana, Georgia, North Dakota,
Arkansas, Kansas, and Nebraska, which together
accounted for 53 percent of yield plan premium
and experienced a loss ratio of 62 percent. The
Rainfall Index program had a loss ratio of 1.00.
Other plans of insurance tended to have either
very poor results (Dollar Amount of Insurance,
Tree Based Dollar Amount of Insurance, Pecan
Revenue, and Aquaculture Dollar had a joint loss
ratio of 3.50) or very good results (all other plans
had a joint loss ratio of 0.13) in 2018.
CROPINSURANCE TODAY®

19



Crop Insurance Today Second Quarter 2019

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