Crop hail payments for three prairie provinces estimated at $280 million in 2012

Crop hail payments to prairie farmers are expected to be about $280 million for 2012, with the average loss per claim rising substantially more in year-over-year comparisons, the Canadian Crop Hail Association (CCHA) reports.

Preliminary estimates peg crop hail claim payouts for 2012 at roughly $280 million on 21,600 losses, notes the CCHA wrap-up of its biweekly reports for 2012, released on Oct. 29. The estimated losses are considerably higher than in 2011, when approximately $164 million was paid on 15,000 losses.

In 2012, almost $341 million was collected from producer premiums for an industry-wide loss ratio of slightly more than 82% compared with a 2011 loss ratio of about 61%.

Payouts per loss have been rising in step with increasing farm size, and per-acre limits for insurance coverage are now higher. Noting that loss per claim is also affected by the severity and timing of storms, the CCHA reports that the average loss per claim in 2012 is expected to be $12,963, approximately $2,000 more than it was in 2011.

By province, Saskatchewan accounted for the largest portion of the payout pie, recording payments of $159 million on about 13,500 losses. That is up from the roughly 11,800 losses and payouts of almost $121 million in 2011.

The CCH notes that in 2012, June losses were about three times higher than average; July was about normal; August was average for numbers, but severity was greater than normal; and the number of losses in September was similar to previous years, although the loss per claim was very high. “Overall, the number of claims was a bit higher than average and the cost per claim was higher than average.”

As for the other prairie provinces, Alberta farmers received hail claim payouts of almost $90 million on a record-high 5,500 losses in 2012 (compared to $36 million for 2011 and $38 million in 2010, on about 2,500 losses for each year); and Manitoba had payments to producers totalling more than $31 million on about 2,500 losses this year (compared to $6.9 million on fewer than 1,100 losses in 2011).