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

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