Top Crop Manager

News
Western Canada crop hail payouts = $249 million

Oct. 16, 2014 - Preliminary estimates show 2014 payouts to Western Canadian farmers for crop hail claims of just over $249 million on 13,372 losses. Producer premiums totalled nearly $316 million for an industry-wide loss ratio of 78.7 per cent.

In comparison to 2013, overall premium totals were down slightly, from $344 million to $316 million, and claim numbers were about on par, with a total of 13,221 claims a year ago and 13,372 reported in 2014. Total payouts increased significantly, to $249 million this year from $172 million a year ago.

Alberta and Saskatchewan recorded losses well above last year's totals, with Alberta reporting a 106.4 per cent loss ratio and Saskatchewan at 73.7 per cent. Although Manitoba did experience some very serious storms, hail damage and subsequent claims were quite light, on average.

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 increased steadily, keeping pace with the growing size of grain farms on the Prairies. The amount of loss per claim is impacted by the severity and timing of storms, and this year saw an increase in the number and violence of storms in many areas, with several areas getting damaging hail more than once during the growing season. The average claim in 2014 was $18,628, up from $13,061 in 2013.

This has been a particularly challenging year for many areas fighting excess moisture and flood conditions. Late crops and weather-related delays have resulted in a very slow harvest across much of Western Canada, making things difficult for both farmers and insurers, but most claim activity has been completed for the season.

Alberta claims up significantly
Total payouts in Alberta were reported at $98 million, well ahead of the $61 million paid out in 2013. Premiums also increased slightly to $92 million, up from $85 million a year ago, while number of policies fell from 8,923 to 8,519. The loss ratio for Alberta was 106.4 per cent, up from 71.9 per cent reported in 2013.

A number of severe weather events in late July and well into August caused serious damage and created a timing challenge for adjusters but the co-operation of farmers in leaving sufficient check strips was good.

Claims in Saskatchewan saw a sharp increase
In Saskatchewan payouts of $134 million over 8,402 claims resulted in a 73.7 per cent average, up from 38.6 per cent in 2013. Number of policies and premium dropped a bit from 2013 but remain within the five-year average. The loss ratio, however, is higher than the five-year and 10-year average, attributed to the severity of the storms this year. A much higher than normal percentage of crop was written off at a 100 per cent loss.

Early July began fairly quietly but saw many violent storms later in the month and well into August, when crops were very vulnerable. The majority of the hail fell in northwest and southwest regions of the province. The three storms of greatest significance were on July 17 and 24 and August 8. The July storms had the highest damage on a by-claim basis while the largest number of claims was filed as a result of the August 8 storm.

Manitoba activity light
The total number of claims in Manitoba was down significantly over 2013 and the loss ratio percentage was the lowest since 2011. Total payouts were also much lower this year than in 2013. The three worst storms in terms of damage sustained were on July 5, August 17 and September 2.

On a reported 6,984 policies written, premiums totaled just under $42 million. Payouts of $16 million over 1,549 claims resulted in a loss ratio of 39.1 per cent, down significantly from the 61.9 per cent loss ratio recorded for Manitoba in 2013.

The Canadian Crop Hail Association (CCHA) represents the companies that sell crop hail insurance to Western Canadian farmers. Statistics reported are of those companies who are members of the CCHA. Many CCHA member companies do business in more than one province. The Hail Report is released every two weeks during the hail season, providing information about hail storms, claims and related issues. This will be the final report issued for the 2014 season.

 

 


October 16, 2014
By Canadian Crop Hail Association