Comments for Crop Insurance Blog http://www.cropinsurers.com/blog The American Association of Crop Insurers Thu, 21 Aug 2008 17:16:07 +0000 http://wordpress.org/?v=2.5.1 Comment on PRP Should Be Halted by ProspectZone Insurance http://www.cropinsurers.com/blog/2007/01/30/prp-should-be-halted/#comment-1487 ProspectZone Insurance Wed, 09 May 2007 15:13:09 +0000 http://www.cropinsurers.com/blog/2007/01/30/prp-should-be-halted/#comment-1487 Isn't this typical Congress? Pass a resolution, change it the next year, and keep going around until nobody knows what the policy is anymore. Even if I disagree with something Congress does, I can appreciate the fact that it's not a tangle of spaghetti-like ammendments. Isn’t this typical Congress? Pass a resolution, change it the next year, and keep going around until nobody knows what the policy is anymore. Even if I disagree with something Congress does, I can appreciate the fact that it’s not a tangle of spaghetti-like ammendments.

]]> Comment on Crop Insurance Profitability by Kent Olson http://www.cropinsurers.com/blog/2007/03/27/crop-insurance-profitability/#comment-497 Kent Olson Mon, 02 Apr 2007 16:22:24 +0000 http://www.cropinsurers.com/blog/2007/03/27/crop-insurance-profitability/#comment-497 Dave: I installed my AACI Blog button. What an idea. It is my quickest and best "one-finger" search for what I work with and need to know about crop insurance. Can you give me an idea of the cost, programing etc as I see this as a wonderfull idea for our North Dakota PIA to "one-button blog" for our members. Iam an old-timer but this Blog Button Idea gives me ideas. Thanks for any direction. Dave:

I installed my AACI Blog button. What an idea. It is my quickest and best “one-finger” search for what I work with and need to know about crop insurance.

Can you give me an idea of the cost, programing etc as I see this as a wonderfull idea for our North Dakota PIA to “one-button blog” for our members.

Iam an old-timer but this Blog Button Idea gives me ideas.

Thanks for any direction.

]]> Comment on Crop Insurance For All Farmers by David Graves http://www.cropinsurers.com/blog/2007/01/11/crop-insurance-for-all-farmers/#comment-439 David Graves Thu, 29 Mar 2007 11:55:17 +0000 http://www.cropinsurers.com/blog/2007/01/11/crop-insurance-for-all-farmers/#comment-439 Great question, Jerry. Actually, the Federal Crop Insurnce Program has been around since 1938. However, only since 1980 has the government partnered with the private sector insurance industry to design and promote crop and livestock coverage options to farmers, ranchers and growers across the nation. Today, 16 companies are approved to participate with the Department of Agriculture in this program. Companies are free to choose where among the 50 states to conduct business. Two of the currently approved companies operate in all 50 states. There is no limit on the number of companies that can apply to participate, however, each applicant must be reviewed and approved by the Federal Crop Insurance Corporation (FCIC)[http://www.rma.usda.gov/fcic], an entity managed by the Risk Management Agency (RMA) [http://www.rma.usda.gov] of the Department of Agriculture (USDA). Great question, Jerry. Actually, the Federal Crop Insurnce Program has been around since 1938. However, only since 1980 has the government partnered with the private sector insurance industry to design and promote crop and livestock coverage options to farmers, ranchers and growers across the nation. Today, 16 companies are approved to participate with the Department of Agriculture in this program. Companies are free to choose where among the 50 states to conduct business. Two of the currently approved companies operate in all 50 states. There is no limit on the number of companies that can apply to participate, however, each applicant must be reviewed and approved by the Federal Crop Insurance Corporation (FCIC)[http://www.rma.usda.gov/fcic], an entity managed by the Risk Management Agency (RMA) [http://www.rma.usda.gov] of the Department of Agriculture (USDA).

]]> Comment on Crop Insurance For All Farmers by Jerry http://www.cropinsurers.com/blog/2007/01/11/crop-insurance-for-all-farmers/#comment-437 Jerry Thu, 29 Mar 2007 02:31:54 +0000 http://www.cropinsurers.com/blog/2007/01/11/crop-insurance-for-all-farmers/#comment-437 This sounds like an interesting concept, but I am wondering how crop insurance will be available across such a broad-spectrum industry. Will one company be selling insurance to all types of farmers in all parts of the country, or will it need to be more specialized than that? Jerry www.leads4insurance.com This sounds like an interesting concept, but I am wondering how crop insurance will be available across such a broad-spectrum industry. Will one company be selling insurance to all types of farmers in all parts of the country, or will it need to be more specialized than that?

Jerry
http://www.leads4insurance.com

]]> Comment on Managing Risk With Revenue Insurance by ESS http://www.cropinsurers.com/blog/2007/02/08/managing-risk-with-revenue-insurance/#comment-275 ESS Fri, 16 Mar 2007 04:16:01 +0000 http://www.cropinsurers.com/blog/2007/02/08/managing-risk-with-revenue-insurance/#comment-275 RA without the Harvest Price Option should not be an option. Seems like every time we have a short crop/high harvest price you hear reports of farmers wanting to sue their agent for not explaining it properly after the farmer had a loss and did not collect. It would be quite foolish to consider this as appropriate coverage when aggressively forward contracting grain. The GRIP policy is basically a gamble on the county revenue. A lottery ticket that can be purchased by those who happen to grow insurable crops within the borders of a GRIP insurable county. Some counties are better "bets" than others. Many farmers will be overpaid, and some will be underpaid for a loss. This results in a highly inefficient and expensive (not to mention unfair) means of dispersing disaster aid. The mentality of a producer purchasing this type of coverage is that he/she hopes for a county revenue loss and a personal non-loss situation. This could result in a windfall for that producer. The risk of course is that you could lose it all if you are in an area of the county that just happens to suffer a loss due to a somewhat localized peril. Long story short, the APH-based plans are the best value all things considered, and are actually insurance. True insurance products are not designed to give a windfall, but to recoup financially from a loss. If the APH-based products are over-priced as some have suggested, maybe the subsidy should be raised, premiums be lowered and participation increased with the promise of no other safety net. RA without the Harvest Price Option should not be an option. Seems like every time we have a short crop/high harvest price you hear reports of farmers wanting to sue their agent for not explaining it properly after the farmer had a loss and did not collect. It would be quite foolish to consider this as appropriate coverage when aggressively forward contracting grain.

The GRIP policy is basically a gamble on the county revenue. A lottery ticket that can be purchased by those who happen to grow insurable crops within the borders of a GRIP insurable county. Some counties are better “bets” than others. Many farmers will be overpaid, and some will be underpaid for a loss. This results in a highly inefficient and expensive (not to mention unfair) means of dispersing disaster aid. The mentality of a producer purchasing this type of coverage is that he/she hopes for a county revenue loss and a personal non-loss situation. This could result in a windfall for that producer. The risk of course is that you could lose it all if you are in an area of the county that just happens to suffer a loss due to a somewhat localized peril.

Long story short, the APH-based plans are the best value all things considered, and are actually insurance. True insurance products are not designed to give a windfall, but to recoup financially from a loss. If the APH-based products are over-priced as some have suggested, maybe the subsidy should be raised, premiums be lowered and participation increased with the promise of no other safety net.

]]> Comment on Managing Risk With Revenue Insurance by Marcel Backman http://www.cropinsurers.com/blog/2007/02/08/managing-risk-with-revenue-insurance/#comment-103 Marcel Backman Thu, 01 Mar 2007 17:10:29 +0000 http://www.cropinsurers.com/blog/2007/02/08/managing-risk-with-revenue-insurance/#comment-103 THe revenue product, RA & CRC, give farmers the **safety net*** they need. With currect levels , they let each farmer purchase the protection according to their individual needs. The present program is one that insured can understand. ALso APH is another good product that fits a farmers need, if this is what he need. We need crop insurance, as this way the farmer does not have to rely on subsidies. THe revenue product, RA & CRC, give farmers the **safety net*** they need. With currect levels , they let each farmer purchase the protection according to their individual needs. The present program is one that insured can understand. ALso APH is another good product that fits a farmers need, if this is what he need. We need crop insurance, as this way the farmer does not have to rely on subsidies.

]]> Comment on Crop Insurance Marketing is Service Competition by David Graves http://www.cropinsurers.com/blog/2007/01/09/crop-insurance-marketing-is-service-competition/#comment-9 David Graves Thu, 18 Jan 2007 16:07:02 +0000 http://www.cropinsurers.com/blog/2007/01/09/crop-insurance-marketing-is-service-competition/#comment-9 The federal government and the private sector share risk in the liabilities of the Federal Crop Insurance Program. The risk is shared under the terms and conditions set forth in the <a href="http://www.rma.usda.gov/pubs/ra/" rel="nofollow">Standard Reinsurance Agreement</a> (SRA) that all companies must sign to become an Approved Insurance Provider(AIP)for the program. There are separate SRAs governing crop and livestock liabilities. 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 <a href="http://www3.rma.usda.gov/apps/reins_public/" rel="nofollow">report generator</a> 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. The federal government and the private sector share risk in the liabilities of the Federal Crop Insurance Program. The risk is shared under the terms and conditions set forth in the Standard Reinsurance Agreement (SRA) that all companies must sign to become an Approved Insurance Provider(AIP)for the program. There are separate SRAs governing crop and livestock liabilities.

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.

]]> Comment on Crop Insurance Marketing is Service Competition by Travis http://www.cropinsurers.com/blog/2007/01/09/crop-insurance-marketing-is-service-competition/#comment-6 Travis Sun, 14 Jan 2007 18:09:54 +0000 http://www.cropinsurers.com/blog/2007/01/09/crop-insurance-marketing-is-service-competition/#comment-6 The Federal Crop Insurance Program is working very well in rural America. I see there is competition, but I would like to know who has the liability if indemnities have to be paid out. Is the money coming out of the crop insurance company's back pocket or is it the Federal Crop Insurance Corporation's money. What percentage is it if both have liability. Would appreciate some explanation if you could. Thanks! The Federal Crop Insurance Program is working very well in rural America. I see there is competition, but I would like to know who has the liability if indemnities have to be paid out. Is the money coming out of the crop insurance company’s back pocket or is it the Federal Crop Insurance Corporation’s money. What percentage is it if both have liability. Would appreciate some explanation if you could. Thanks!

]]> Comment on Crop Insurance For All Farmers by Dr. G S Rao http://www.cropinsurers.com/blog/2007/01/11/crop-insurance-for-all-farmers/#comment-5 Dr. G S Rao Sat, 13 Jan 2007 17:06:50 +0000 http://www.cropinsurers.com/blog/2007/01/11/crop-insurance-for-all-farmers/#comment-5 It is great idea! We appriciate and optimistic to see that this proposal to reach each and every farmer across all the corners of the world. It is great idea! We appriciate and optimistic to see that this proposal to reach each and every farmer across all the corners of the world.

]]> Comment on Federal Crop Insurance - A "Bedrock" Program by Dee Lohse http://www.cropinsurers.com/blog/2006/12/19/federal-crop-insurance%e2%80%94a-bedrock-program/#comment-3 Dee Lohse Fri, 22 Dec 2006 16:03:17 +0000 http://www.cropinsurers.com/blog/2006/12/19/federal-crop-insurance%e2%80%94a-bedrock-program/#comment-3 I too have seen farmers come to rely on their federal crop insurance as a major factor in their risk management program. Even though crops have been better the last 4 years in our area, farmers still remember how well the program worked for them when production was down significantly, and they believe in the product. They realize that they will never make money in a crop insurance situation, but they also know that crop insurance can be the difference between farming and not farming. They understand the program better and work harder to comply with the rules and requirements. They are concerned about abuse in the program and "a few" ruining the program for the rest of them. I hope we will stay committed to encouraging farming in this country. I too have seen farmers come to rely on their federal crop insurance as a major factor in their risk management program. Even though crops have been better the last 4 years in our area, farmers still remember how well the program worked for them when production was down significantly, and they believe in the product. They realize that they will never make money in a crop insurance situation, but they also know that crop insurance can be the difference between farming and not farming. They understand the program better and work harder to comply with the rules and requirements. They are concerned about abuse in the program and “a few” ruining the program for the rest of them. I hope we will stay committed to encouraging farming in this country.

]]>