Crop Insurance Today First Quarter 2020 - 14

What follows is a summary of 2010 to 2019 weather
conditions and related impacts from 2010 to 2019 Year in
Review's. Loss ratios are based on USDA, RMA, Summary of
Business National Reports as of 1-6-2020.
1

14

FIRSTQUARTER2020

MPCI-Liability and Premium Totals, 2010-2019
120,000

12,000

100,000

10.000

80,000

8.000

60,000

6,000

40,000

4,000

20,000

2,000

0

2010	2011	2012	2013	2014	2015	2016	2017	2018	2019

Source: NCIS Summary of Business as of 1/6/2020

Premium (Millions)

14,000

Liability (Millions)

140,000

0

Crop Year
Source: RMA Summary of Business as of 1/6/2020

necessary tools to manage their risks.
2018 saw the removal of the $20 million funding limitation on livestock plans of insurance and
subsequent introduction of the new Dairy Revenue Protection plan of insurance, as well as various program improvements, particularly the addition of hemp as an insurable commodity. RMA
also made significant efforts to coordinate policy
requirements regarding good conservation practices and cover crop activities working closely
with NRCS, and near the end of 2018 announced
the development of the Multi-County Enterprise
Unit (MCEU) continuing the evolution in Federal crop insurance. And in 2019, the highest ever
recorded number of prevented plant acres occurred with roughly 19 million acres unplanted,
leading to the introduction of a first-ever disaster
assistance supplemental payment being delivered
through the crop insurance delivery system.
Throughout the decade there was a constant

and ongoing effort to expand crop insurance
programs, with collaborative efforts by the government and private sector to introduce almost
150 new products, including many new specialty
crops, tree programs, new revenue and margin
approaches, and various targeted endorsements
or options, to improve existing programs. This
also includes new programs for 2020 like the
Hurricane Insurance Protection-Wind Endorsement and the new Nursery Value Select policy.

Federal Crop Insurance
Performance

Over the past decade extreme variations in
weather resulted in both good years and bad for
production agriculture making weather an important, if not the most important, driver influencing crop insurance industry performance.1
The decade began with generally favorable
weather conditions in 2010, leading to large

MPCI-Loss Ratio, 2010-2019
1.80
1.60
1.40
1.20
Loss Ratio

many new and improved policy features. WFRP
combined the previous AGR and AGR-Lite pilot programs. The Conservation Title of the Act
also required producers to adhere to conservation compliance requirements to be eligible for a
crop insurance premium discount. Lastly, RMA
released the Area Risk Protection Insurance Plan
combining the existing area-based plans GRP,
GRIP and GRIP-HPO into one policy offering,
while also ushering in a new era of greater and
expanded use of crop insurance data reported to
RMA in managing USDA programs.
The middle of the decade saw changes to the
Rainfall and Vegetation Index Pasture, Rangeland, Forage (PRF) programs replacing both with
a new and improved Rainfall Index -PRF program
that was expanded to all 48 contiguous states.
Program integrity efforts continued through
more comprehensive review and sampling methodology for determining the program's improper
payment rate, resulting in a 2016 improper payment rate of 2.02 percent, down from 2.2 percent
in 2015 and 5.58 percent in 2014, and well below
the government-wide improper payment rate of
4.67 percent in 2016 and 4.39 percent in 2015.
By 2017, acres insured surged to 311 million
due to growth in the PRF program, and producers continued to purchase high coverage levels
with around 82 percent of the acres for major
crops covered at 70 percent or higher. And the
latter part of the decade saw changes to prevented planting coverage including removal of the
option for producers to purchase 10 percent additional coverage, and the updating of payment
coverage factors for most crops.
When farm policy critics predictably suggested that Congress use the Agriculture Improvement Act of 2018, commonly known as the
2018 Farm Bill, to undermine crop insurance,
rural America quickly told Capitol Hill to "do no
harm" to crop insurance.
At listening sessions held across the country
by the House Agriculture Committee, farmers,
ranchers and agricultural lenders made it clear
that the crop insurance program is critical to the
success of the farm economy.
The 2018 Farm Bill passed Congress in a historic bipartisan vote as members of Congress
from across the aisle joined together to protect
crop insurance and provide farmers with the

1.00
0.80
0.60
0.40
0.20
0.00

2010	2011	2012	2013	2014	2015	2016	2017	2018	2019
Crop Year

Source: NCIS Summary of Business as of 1/6/2020

Source: RMA Summary of Business as of 1/6/2020



Crop Insurance Today First Quarter 2020

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Crop Insurance Today First Quarter 2020 - Cover2
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Crop Insurance Today First Quarter 2020 - Cover3
Crop Insurance Today First Quarter 2020 - Cover4
https://www.nxtbook.com/allen/cint/54-1
https://www.nxtbook.com/allen/cint/53-4
https://www.nxtbook.com/allen/cint/53-03
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http://www.brightcopy.net/allen/cint/51-02
http://www.brightcopy.net/allen/cint/51-01
http://www.brightcopy.net/allen/cint/50-04
http://www.brightcopy.net/allen/cint/50-3
http://www.brightcopy.net/allen/cint/50-2
http://www.brightcopy.net/allen/cint/50-1
http://www.brightcopy.net/allen/cint/49-4
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https://www.nxtbook.com/allen/cint/november2012
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