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Crop hail payouts of $167 million

Oct. 15, 2015 - Preliminary estimates from the Canadian Crop Hail Association (CCHA) show 2015 payouts to Western Canadian farmers for crop hail claims of just over $167 million on 13,222 losses. Total payouts dropped significantly from the 2014 figure of $249 million on 13,372 losses. Producer premiums totalled nearly $274 million for an industry-wide loss ratio of 61.1 per cent.

Manitoba was hardest hit this year, with recorded losses of $46 million, well above last year's total losses of $16 million. Saskatchewan and Alberta both came in below last year's numbers. Alberta reported a 66.3 per cent loss ratio, down from 106.4 per cent in 2014, and Saskatchewan reported 45.6 per cent, down from 73.7 per cent last year.

The lowest losses in recent history were recorded in 2009, at just $76 million, with a loss ratio of 29 per cent. Loss statistics do not include the cost of adjusting claims.

Payouts per acre and per acre insurance limits have climbed steadily over the years, as individual farm size increases across the Prairies. The amount of loss per claim is impacted by the severity and timing of storms. This year, while there were several storms of significance across the Prairies, the overall impact was less severe than a year ago. The average claim in 2015 was $12,645, down from $18,628 in 2014.

Harvest was generally later this year, with challenges resulting from excess moisture in some regions, severe drought in others and uneven maturity across large areas. Rain has slowed operations in many areas over the past three weeks. The slow harvest has created some difficulty for farmers and insurers trying to cover all claims ahead of the combine, but most claim activity has now been completed for the season.

Alberta payouts drop year-over-year
Total payouts in Alberta were reported at $50 million, well under the $99 million paid out in 2014. Premiums dropped from $92 million in 2014 to $75 million. At 66.4 per cent, the loss ratio for Alberta was down significantly from last year's 106.4 per cent.

Overall, 2015 was an average year for hail claims in Alberta. Some scattered hail during late September caused shelling damage to the mature crops in several isolated areas throughout east central Alberta. Crop yields have exceeded early expectations, overall, but remain below long-term averages. Quality appears to be within average, with late harvested crops expected to grade slightly lower.

Quiet claim year in Saskatchewan
In Saskatchewan, payouts of $71 million over 6,936 claims resulted in a 45.6 per cent average, down from 73.7 per cent in 2014. Number of policies remained very similar to the previous year, and a drop in premium may be attributed to a general reduction in rates.

The number of major storms was down from the average, and the three most significant events hit earlier in the growing season. Hail was reported on 94 days, which is well within the norm, but the size and severity of the storms was much less than usual. Hail claims were quite general across the province, reported in 261 out of 297 municipalities.

Hail losses in Manitoba well above average
Manitoba suffered a tough summer in terms of hail losses, which came in well above the five-year average.
On a reported 7,894 policies written, premiums totaled $42 million, which was on a par with 2014. Payouts, however, were up significantly from $16 million in 2014 to $46 million in 2015. This was the result of several severe events in late June and August; the costliest storm in terms of hail claims occurring on August 1. This year's loss ratio of 108.6 per cent was a sharp increase from the 2014 number of 39.1 per cent.

Crop yields in Manitoba are generally at or slightly above 10 year average yields. However, lower than average yields for various crop types were reported in some areas of the province, largely due to extreme weather events during the growing season including May and June frost events, wind resulting in lodging, hail and extremes in moisture.