Crop Insurance Today First Quarter 2020 - 10

Canadian Crop-Hail Performance
Manitboa
Premium
Loss
Percentage

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Combined

37,667,820 31,137,382 48,768,174 49,467,181 42,356,494 43,152,421 48,040,762 51,777,420 56,982,352 52,596,858 461,946,864

14,585,838 6,859,300 31,440,967 30,633,254 17,979,749 46,935,251 74,537,805 32,789,406 47,103,943 48,916,053 351,781,565

39% 22% 64% 62% 42% 109% 155% 63% 83% 93% 76%

Saskatchewan
Premium

164,482,311 168,416,565 212,272,420 209,519,839 183,576,122 160,896,930 184,314,880 170,337,892 158,951,364 140,373,924 1,753,142,247
Loss

102,765,650 121,684,181 158,629,369 80,856,836 133,069,465 75,039,730 128,983,980 51,405,692 104,010,860 134,575,710 1,091,001,474
Percentage

62% 72% 75% 39% 72% 47% 70% 30% 65% 96% 62%
Alberta
Premium
Loss
Percentage

62,168,127 68,466,460 79,432,844 85,113,606 93,426,945 79,140,438 87,126,098 91,351,676 80,858,991 70,964,559 798,049,744

38,272,083 36,332,401 86,463,570 62,194,600 113,608,186 54,386,920 90,771,373 31,335,095 33,971,111 63,666,820 611,002,158

62% 53% 109% 73% 122% 69% 104% 34% 42% 90% 77%

Combined
Premium
Loss
Percentage

264,318,258 268,020,407 340,473,438 344,100,626 319,359,561 283,189,788 319,481,740 313,466,988 296,792,707 263,935,341 3,013,138,854

155,623,571 164,875,882 276,533,906 173,684,690 264,657,400 176,361,901 294,273,158 115,530,193 185,085,914 247,158,583 2,053,785,197

59% 62% 81% 50% 83% 62% 92% 37% 62% 94% 68%

190 percent respectively. Loss ratios in 2015 and
2016 were roughly equal for the two blocks of
business; however, production plan experienced
higher loss ratios again during 2017 and 2018,
118 percent and 126 percent respectively, compared to standard hail, 84 percent in each year.
An important consideration while interpreting these results, is that production plan and
standard hail are not written in the same geographic locations or to the same degree, nor does
hail occur with the same frequency and intensity
every year. Production plan writings are concentrated in a limited number of states, thus if hail
losses are also concentrated in those states during
a given year, production plan loss ratios will be
affected to a much larger degree than those for
standard hail.
Several major hail events that contributed
to the above results are highlighted next as well
as those states which were disproportionately
impacted.

During 2011, the largest one-day storm occurred in Minnesota on July 1 with $42.2 million of damage. Missouri, with $16.3 million
of written premium had the highest loss ratio
of any state at 288 percent. Total payments for
2011 doubled compared to 2010 to just under
$975 million.
2014 suffered several large hailstorms, contributing to the largest annual industry loss
payments on record of $1.2 billion. The most
significant of these storms occurred on June 3 in
Nebraska, causing damage resulting in $145 million of indemnity, equivalent to 12 percent of the
year's loss. Production plan is popular in Nebraska and the state accounts for a significant portion
of countrywide production plan premium, so the
very high 2014 production plan loss ratio is not
unexpected.
2016 experienced five storm days exceeding
$25 million of loss payments. The worst single day
was July 5, with losses of more than $36 million,
primarily in Minnesota and Nebraska. On July 9,
a storm caused $35 million of loss, $28 million of
which was concentrated in North Dakota.

2018 had four days, each of which exceeded
$23 million in hail loss. The single worst day was
June 30, when a storm caused more than $34 million of loss, $26 million of which was concentrated in Nebraska.

Canadian Crop-Hail Results

The Canadian Crop-Hail Association
(CCHA) is a member-driven organization representing the Canadian Crop-Hail Insurance
Industry. CCHA represents companies made
up of private sector insurers, managing general
agencies, a co-operative, and municipal and provincial government hail programs. The business
is primarily written and reported in the provinces
of Alberta, Saskatchewan, and Manitoba. CCHA
members are also NCIS members and utilize
NCIS developed loss procedures. CCHA and
NCIS also sponsor joint loss adjustment research
projects in Canada.
With a decade loss ratio of 68 percent and
premiums of over $3 billion reported on the Canadian prairies, the Canadian Crop-Hail Industry has enjoyed a successful decade.
Average yearly premiums grew from 2010
to 2016 reaching a high of $319 million.
Those totals have since subsided to $263 million, less than that of 2010. Industry risk (li-

Crop Insurance Today First Quarter 2020

Table of Contents for the Digital Edition of Crop Insurance Today First Quarter 2020