U.S. Drought Plaques Crop Insurers, Worst Results in 25 Years
U.S. Crop Insurers Experiencing Worst Results Since 1988
By Amanda Brodhagen, Farms.com
One of the hottest stories of 2012 continues on through to 2013, as the U.S. drought is being blamed for the worst results for crop insurers in 25 years.
The ratings were found by firm A.M. Best Co., as they reported that the losses in the third quarter of 2012 will be an estimated $15.5 billion and on estimated premiums about $11 billion.
The findings were presented in a report entitled “As Drought Lingers, Crop Insurers Face Worst Underwriting Results in 25 Years,” incorporates data from a number of survey firms that offer multiple peril crop insurance (MPCI), which is a program subsidized by the U.S. government where insurance is sold by private firms.
The report states that U.S. experienced the hottest March on record, coupled with the hottest and driest June-July period since 1936. The report also finds that by the end of Nov. 2012 that drought conditions never showed signs of improving, which means that the droughts ongoing impact is also negatively impacting the winter wheat crop.
The most recent crop insurer results illustrate that crop insurance is no longer a small program and its rising costs should concern lawmakers in Washington.