Crop Insurance Today November 2014 - (Page 1)

TODAY PRESIDENT'SMESSAGE "...Where to now, St. Peter?" Viability: Tipping Points and Headwinds Laurie Langstraat, Editor TODAY® IS PROVIDED AS A SERVICE OF NATIONAL CROP INSURANCE SERVICES® TO EDUCATE READERS ABOUT THE RISK MANAGEMENT TOOLS PRODUCERS USE TO PROTECT THEMSELVES FROM THE RISKS ASSOCIATED WITH PRODUCTION AGRICULTURE. TODAY is published quarterly-February, May, August, and November by National Crop Insurance Services 8900 Indian Creek Parkway, Suite 600 Overland Park, Kansas 66210 www.ag-risk.org If you move, or if your address is incorrect, please send old address label clipped from recent issue along with your new or corrected address to Donna Bryan, at the above address. Tom Zacharias, NCIS President This is the last in our three part series "...Where to now St. Peter?" that we began earlier this year. The purpose for the series was to start thinking about the future path of the crop insurance industry as we implement the Farm Bill and enter a new paradigm in farm policy. Our physical metaphor is a stable threelegged stool. The first two legs of the stool we discussed were "Availability" (Crop Insurance TODAY®, May 2014) and "Affordability" (Crop Insurance TODAY®, September, 2014). Now we turn our focus to the issue of viability, specifically the economic viability of the private sector delivery system. As one of the three legs of the stool, the "viability" of the private sector delivery system is integral to the health and overall well-being of the crop insurance program. Viability Defined Stepping back for a moment, it is important to define a few terms and put our discussion in perspective. First, the term "viability." In a business context, "viability" can be defined as the "capacity to operate or be sustained" (Dictionary.com); alternatively, "viable" can be defined as "having a reasonable chance of succeeding...financially stable..." (Merriam Webster Online Dictionary). The Parties Involved NCIS® EXECUTIVE COMMITTEE Tim Weber, Chairman Mike Day, Vice Chairman Jim Korin, Second Vice Chairman NCIS® MANAGEMENT Thomas P. Zacharias, President Charles Lee, General Counsel James M. Crist, CFO/COO Frank Schnapp, Senior Vice President Mike Sieben, Senior Vice President Creative Layout and Design by Graphic Arts of Topeka, Inc., Kansas Printed on recycled paper. Time and time again in this publication and elsewhere, the expression "public-private partnership" is used to describe the United States crop insurance program. The public element of the partnership is personified by the United States Department of Agriculture (USDA) and the Risk Management Agency (RMA), the Federal agency responsible for administering Federally regulated crop insurance. Responsibilities of the RMA include: the development of crop insurance policies and the underlying procedures, establishment of fair and adequate premium rates, provision of financial support and risk-sharing of premium and losses and regulatory oversight of the crop insurance companies. The "private" element of the partnership is comprised of the insurance companies, crop insurance agents, crop adjusters and the reinsurance community. Crop insurers are responsible for selling and servicing the policies, equitable and timely adjustment of crop insurance claims and risk-sharing of premiums and losses with USDA/RMA. In this partnership, there is a key factor that determines the economic viability of the private sector delivery system. Simply put, in order to remain viable, crop insurance companies and the industry as a whole need to generate an adequate return on their investment. The fact that sufficient returns are needed to keep enterprise moving is not an earth-shattering revelation, but it is at the core of the public-private crop insurance partnership, and far too often, it is misunderstood and overlooked. Printed with Environmentally friendly vegetable oil based inks. Continued on page 38 CROPINSURANCE TODAY® 1 http://www.ag-risk.org http://www.ag-risk.org http://www.Dictionary.com

Table of Contents for the Digital Edition of Crop Insurance Today November 2014

Viability: Tipping Points and Headwinds
Hosting a Successful Adjusting School As Easy as Apple Pie?
What to Watch for with New Herbicides
NCIS 2014 Adjuster School 14 for ‘14
1890 Scholarship Recipients
Crop Insurance Plan Comparison
A Voice for Agriculture
In Memory of David Gabriel and Kent Petersen
Whitmore Retires After 27 years in Crop Insurance

Crop Insurance Today November 2014