Hail payouts total $280 million – final report for 2012

Based on preliminary estimates, payouts to Prairie farmers for 2012 crop hail claims total roughly $280 million on 21,600 losses. A total of nearly $341 million was collected from producer premiums for an industry-wide loss ratio of just over 82 per cent.
 
Disease and wind damage made it challenging for adjusters to determine the hail damage on many canola fields this year. Losses are considerably higher than 2011when approximately $164 million was paid on 15,000 losses. The 2011 loss ratio was just over 61 per cent.
 
Payouts per loss have been rising over the years as farms grow larger. As well, there are now higher per-acre limits for insurance coverage. Loss per claim is also affected by the severity and timing of storms. The average loss per claim in 2012 is $12,963, about $2,000 more than last year.
 
The lowest losses in recent memory were in 2009 at only $76 million. The loss ratio that year was roughly 29 per cent.  Payouts for 2008 totalled a record high $341 million and the loss ratio was 118 per cent. Loss statistics do not include the cost of adjusting claims.
 
Alberta hit hard
 
Alberta farmers are receiving nearly $90 million in hail claim payouts on a total of 5,500 losses. This is for the hail insurance claims over and above crop insurance endorsements. Just over $79 million was collected in premiums, so the loss ratio is 113 per cent.  While results vary from one company to another, overall more money was paid to producers than was received in premiums.
 
By comparison, Alberta farmers received $36 million in hail claim payouts for 2011 and $38 million in 2010. In both years, there were about 2,500 losses. At 5,500, the number of losses in Alberta this year is a record high. However, 2008 had higher total payments than this year.

 Saskatchewan losses increase
 
The compilation of results for Saskatchewan shows payments of $159 million on 13,500 losses. Producer premiums were about $212 million, so the loss ratio is 75 per cent.
 
Last year, there was a total of roughly 11,800 losses and total payouts of nearly $121 million. Producer premiums in 2011 topped $168 million generating a loss ratio of about 72 per cent.
 
For 2009, payouts in Saskatchewan were a modern-times record low of $23.4 million with a very low loss ratio of 13.6 percent. In 2008, payouts were a record high $228 million and the loss ratio was 129 per cent.
 
For 2012, June losses were about three times higher than average. July was about normal. August was average for numbers, but the severity was greater than normal. For September, the number of losses was similar to previous years, but 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.
 
Higher losses in Manitoba
 
Manitoba recorded about 2,500 losses with payments to producers totaling over $31 million. Producer premiums were nearly $49 million generating a loss ratio of 64.5 per cent.
 
In 2011, there were fewer than 1,100 losses with payouts of approximately $6.9 million. With over $31 million collected in producer premiums, the loss ratio was only 22 per cent.

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