Indemnity payments on U.S. multiperil crop insurance policies set a new record of $9.1 billion in 2011, and could still pass $10 billion when all is said and done, according to new data from the trade group National Crop Insurance Services.
The industry’s prior record of $8.67 billion was set in 2008 bringing total payouts over the past four years to $27 billion, NCIS said. Major losses were booked in 2011 on flooding of the Mississippi River, frost in the Southeast and droughts across the Great Plains. However, the growing popularity of “revenue insurance” policies, as well as high commodity prices, also certainly had an impact.
In their announcement, NCIS looked to spin the losses as a defense against any further cuts to the Federal Crop Insurance Corp. in the pending 2012 Farm Bill, noting that the industry already has taken $12 billion in cuts over the past several years.
“Two out of the last four years have seen the largest indemnity payments in history, all while the crop insurance industry was asked to do more with less,” said (NCIS President Tom) Zacharias. “The industry has become leaner and more efficient as it continues to serve the risk management needs of U.S. farmers.”