Early Planting Not Good for Crop-Hail Insurers
04-01-12
Crop-Hail Insurers who are still reeling from last year's devastating losses may not find much relief with this year's early spring. While some farmers are waiting on crop insurance beginning planting dates, others are getting itchy to put seed into the ground. The unusually warm weather will cause plants to leap out of the ground and crops will be at much more advanced vegetative stages when early storms strike compared to the average.
Advanced crop growth stages means greater crop losses to hail. Early storms that normally would have pounded bare ground or the growing point still below the surface, this year will have stems and leaves to shred.
Historically, an early start would also mean that replant provisions would limit hail losses to companies. However, in recent years, the replant provisions have changed from a mandatory cap on early losses to an optional benefit to the farmer. Most policies will pay on the early hail damage and then the farmer can replant and insure the second crop again at his option.
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CropInsuranceXpert.com Launches New Research, Competitive Intelligence, and Product Analysis Consortium
CropInsuranceXpert.com, a business unit of CVision, is launching a new membership consortium. The consortium members will be able to share various topical research, product analyses, and competitive intelligence reports relevant to US crop insurance. Consortium members will also be able to request specific research, program audits, and product reports for their exclusive use.
Crop Insurance Industry
in flux
Steve Griffin, the analyst behind the new service, says that "it is readily apparent that the economics of the crop
insurance industry are in a state of flux and not for the better. Its fortunes are teetering on the next move
of the US Congress and Mother Nature. Furthermore,
the “deck” is being stacked differently than in the past." He cites the following points for crop insurance stakeholders to consider as they look to the crop year ahead:
- The 2011
Standard Reinsurance Agreement (SRA) imposed significant cuts on the
federal crop insurance program.
- RMA is
implementing a new, untested, rating methodology that significantly lowers
premium rates on major volume crops, corn and soybeans, in the Midwest.
- Guarantees
based on “trend adjusted” APH yields are increasing the effective coverage
level at average (not marginal) premium rates.
- Increased
subsidies and significant discounts is shifting the book of business to
enterprise units.
- The premium volume required for a crop insurance writer to capture economies of scale has grown substantially.
The implications of these changes are far-reaching. Stakeholders, such as reinsurers, who previously have placed their trust in a continuance of prior profits are in for a surprise. To avoid surprises, they need to arm themselves with a new, unbiased, and sound intelligence gathering service.
Contact Information
Stakeholders interested in this new service should email:
info@cropinsurancexpert.com or use the following:
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