Risk sharing between companies and the federal govenment is calculated using fairly complex formulas to account for all of the differences that can exist between companies, including amount of capital and risk profile. Thus, the sharing of risk with the federal government can and usually does vary by company. Generally, at the national level, companies are retaining around 80% of the program’s premiums and associated liabilities. For example, in 2006, companies retained 78.9% of premium and 84% of liability. The Risk Management Agency(RMA)of the Department of Agriculture (USDA), which manages the Federal Crop Insurance Program, provides a report generator on its website that will show how much is shared by year and by state.

The sharing of indemnity payments is further filtered through operation of risk management pools (currently there are three: assigned risk, developmental, and commercial) to determine the ultimate sharing of losses for a given year. Generally, sharing of risk is aggregated at the state and company level because not all companies operate in every state. The pools and the formulas for risk sharing can be found in the SRA.

Indemnity payments are paid to insureds by the AIPs (the insurance companies)and the Federal Crop Insurance Corporation(FCIC)(the government) reimburses a portion of these payments based on the risk sharing formulas. Therefore, the money that an insured receives as an indemnity is actually a combination of both Federal and private and the percentages vary by year and state depending on the severity and level of losses in a particular year.

I hope this information is helpful.