Crop Insurance Today Second Quarter 2020 - 25

inability to timely harvest sugar beets and
other crops in the Northern Plains. With the
unprecedented number of prevented planting acres along with growing crop damage in
many parts of the nation (Figure 17), RMA
provided additional relief allowing famers to
defer premium payments along with interest
charges until later in the fall. And as conditions continued to deteriorate in several major producing areas, RMA extended the period of deferral until the end of January 2020
helping impacted producers by easing their
cash flow challenges.
While the 2019 crop year was historic regarding the number of prevented planting
acres, it also, for the first time, leveraged the
services of AIPs in delivering disaster assistance to farmers who had received prevented planting crop insurance payments. USDA
and RMA worked with AIPs to deliver an
automatic "top-up" payment as part of the
Additional Supplemental Appropriations
for Disaster Relief Act of 2019 passed by
Congress. Once authorized and directed by
RMA, AIPs timely and efficiently delivered
over $590 million in additional disaster support payments seamlessly utilizing the data
and information from existing crop insurance prevented planting indemnities. This
was reflected in RMA Administrator Martin
Barbre's comments when he said, "Crop insurance is an important program for many
producers to help them manage their production and price risks. We're leveraging that
system to efficiently and effectively deliver
much needed support to our farmers." The
effort, timeliness, efficiency, and performance in delivering these funds to producers reinforced the unique government and
private sector relationship that has so often
fostered the success of the Federal crop insurance program in assisting producers in
their time of need.

Summary reports.
Crop-Hail premium has risen substantially over the past 10 years. Premium for 2019
was just over $1 billion; the first time the private Crop-Hail program has ever surpassed a
billion dollars in premium. This is an increase
of $27.8 million in premium, up 2.8 percent
from $987.3 million in 2018. Crop-Hail provided $35.3 billion in private insurance protection to U.S. farmers in 2019, while losses
paid out were $997 million (Table 7), a six
percent increase over 2018.
The program loss ratio, defined as paid
losses divided by premium written, increased
to 0.97, up slightly from 0.95 in 2018 and 0.96
in 2017. Seven of the past 10 years have seen
loss ratios of 0.90 or more with the record being the 2014 loss ratio of 1.22.
There were five storm days that exceeded
more than $20 million in losses in 2019. A
storm that occurred on July 20 caused more
than $22 million of damage with $8.2 million
in Minnesota, $7.8 million in South Dakota,
and $3.9 million in Iowa. $25 million of storm
damage occurred on August 6 and was widespread across the Midwest with North Dakota
($8.4 million), South Dakota ($5.5 million),
Nebraska ($4.9 million), and Minnesota ($3.5
million) bearing the brunt of the storm. The
single worst day was August 7, when a storm
caused damages of more than $26 million,
primarily in Nebraska where $23 million in
damage occurred. And almost a month later,
on September 2, storms again caused $26 million in damage, with North Dakota and Minnesota having $13.3 million and $11.4 million
in damages, respectively.
In total, the losses from the top 10 storm
days amounted to $206 million, down from
Table 7

U.S. Crop-Hail Experience

Crop-Hail insurance are policies that insure direct damage from hail as the primary cause of loss. In addition to hail damage,
many policy forms carry endorsements for
additional perils such wind, fire, vandalism,
and theft. This section reports the results for
all losses on hail policies, including the experience of NCIS non-member companies
not included in NCIS' Annual Statistical

Fig. 19

2019 Prevented Planting
Indemnity: Top 15 States

RANK

STATE

INDEMNITY

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

SD
IL
OH
MN
MO
IN
AR
ND
MI
WI
MS
IA
KS
NE
TX

935,124,705
414,391,369
388,983,946
343,830,931
275,711,579
244,703,217
231,434,153
211,488,772
199,630,631
134,814,720
134,077,171
132,286,236
103,197,269
101,534,755
98,307,992

Other States
Total Prev. Plant.

314,537,137
4,264,054,581

Data as of April 13, 2020 Source: RMA Summary of Business
Perils Shown: Excess Moisture, Cold Wet Weather & Flood

$211 million in 2018, and well below the
$420 million paid out in 2014. Five states
took the brunt of the major storms, with Nebraska absorbing $60 million of loss, North
Dakota with $40 million, Minnesota with
$32 million, Kansas with $21 million, and
South Dakota with $15 million.
Crop-Hail loss ratios by state are shown in
Figure 20. Colors identify states with similar
loss ratios, while shading is used to identify
states with similar premium volume. CropHail insurance was purchased in 42 states in
2019. Of these, 13 had loss ratios greater than
1.00; these are shown in red and brown on
the map. Louisiana had the highest loss ratio
by far at 1.87.
The top five premium volume states -

U.S. Crop-Hail Results, All Perils

CROP YEAR

LIABILITY
Mil. $

PREMIUM
Mil. $

LOSSES
Mil. $

LOSS RATIO

2010
2011
2012
2013
2014
2015
2016
2017
2018
2019

27,170
36,691
39,407
39,773
39,652
36,805
36,178
35,775
36,084
35,359

682.2
843.2
955.8
953.2
991.7
979.7
983.3
958.8
987.3
1019.6

460.4
974.5
704.3
646.2
1,209.9
740.3
880.1
882.0
937.4
996.5

0.67
1.16
0.74
0.68
1.22
0.76
0.90
0.92
0.95
0.98

Data as of April 8, 2020
Source: Adjusted Verified Totals, US only, for NCIS member companies combined with the data from non-members.

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Crop Insurance Today Second Quarter 2020

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