Claim payments to Prairie farmers topped $322 million, and were up 78 per cent compared to the five-year average. It was the highest payout since 2008 and meant insurers, which collected $309 million in premiums, had a loss ratio of 104 per cent.

Saskatchewan was the hardest hit with an industry loss ratio of 134 per cent (compared to 65 per cent in 2020). Alberta had a 97 per cent loss ratio (versus 75 per cent last year) but Manitoba only had a loss ratio of around 26 per cent.

The association insured more than $8 billion in crops in 2021.

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Overall, the industry will record a near break-even type of year. Claims produced insurance payouts of over $192 million on more than 12,100 claims in Western Canada. Producer premiums totalled just over $300 million for an industry loss ratio of 64 per cent. Industry premiums have decreased an average of 15 per cent over the past five years.

The number of storm days in some parts of the Prairies were below average this summer, but storm severity made up for the decrease.

Hardest hit was Alberta with an industry loss ratio of 83 per cent, which is similar to 2019. Saskatchewan followed with a 65 per cent loss ratio (down from 95 per cent from a year earlier) while Manitoba saw limited hail activity posting a 29 per cent loss ratio after suffering a 93 per cent loss ratio in 2019.

Alberta’s storm activity was similar to 2019. An early severe storm that pummelled the city of Calgary also caused crop damage. However, early crop recovery helped lessen industry losses. Claim activity was up over 26 per cent compared to the five-year average, while claim severity (at more than $20,000 per claim) was higher by more than 20 per cent compared to the average. Total hail payments for 2020 were reported at just over $69 million. Total sums insured increased for 2020, with rates appearing to stabilize.

In 2019, Canadian Crop Hail Association member companies paid $242 million on 16,200 claims.

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There have been more than 10,000 claims this year, the association said in an Aug. 31 release. Alberta has about one-quarter of those claims.

“Claims filed in Alberta are currently close to last year’s numbers, but they are above the five-year average for claim payments,” said association president Rick Omelchenko.

Saskatchewan had about 60 per cent of claims so far but it is also around the five-year average. Omelchenko also said claim processing has not been delayed by the pandemic.

“We’ve processed more than half of the claims so far, beating our turnaround time compared to last year,” Omelchenko said.

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There was an early start to the hail season, with June 9, 14 and 25 being the top three storm dates — producing more than 100 claims and averaging more than $12,000 per claim.

However, the most expensive storm dates were July 13, 19 and 20, with these storms accounting for 31 per cent of the total claim payouts.

Total hail payments were just over $25 million, which is on par with 2017. Storm severity decreased by about three per cent, but storm frequency was up about 12 per cent from 2017. The overall reported loss ratio (ratio of claims to premiums) was 40 per cent in Alberta (compared to 34 per cent in 2017).

Over all on the Prairies, 2018 was average for claims but there were higher-than-average claim payments. Insurance payouts were about $161 million on about 11,200 claims in Western Canada. Producer premiums totalled just over $264 million for an industry loss ratio of 61 per cent.

Premiums decreased eight per cent this year following a record-low hail year in 2017.

Manitoba had a loss ratio of 71 per cent (versus 47 per cent in 2017) while Saskatchewan had a 66 per cent loss ratio (compared to 30 per cent in 2017).

Prairie farmers continue to insure their crops for hail damage at near-record levels in 2018, with hail sums insured topping $6.3 billion. However, in Alberta, total sums insured decreased in 2018, with average charged rates showing a continued decline from 2017. The decrease in sums insured resulted in a premium decline for 2018.

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 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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The Canadian Crop Hail Association represents the companies that sell crop hail insurance to producers in Western Canada. The Hail Report is released every second Friday during the hail season to provide information on storms, claims and related issues. The report is compiled by Kevin Hursh of Hursh Consulting & Communications in Saskatoon.

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The majority of the claims come from a storm system that followed the U.S. border on July 3 and 4 damaging crops near Pipestone, Reston, Sinclair, Deloraine, Killarney, Crystal City, and Snowflake. Damage is reported as being extremely severe in some locations.

Spotty hail was also reported on July 11 between Swan River and Minitonas as well as on July 12 and 13 in the Purves, Neepawa, and Carberry areas.

Claims continue to pile up in Saskatchewan

The claim total for Saskatchewan is approaching 5,000. That’s more than double the number that had been received two weeks ago. Claims for Saskatchewan are running ahead of normal for this time of year.

Major storm dates and locations include:

July 1 – Mortlach
July 2 – Eston, Glidden, Eatonia
July 3 – Lafleche, Caronport, Lumsden, Elbow, Bethune, Simpson, Lanigan, LeRoy, Quill Lake, Rosthern
July 4 – Gainsborough, Carievale, Storthoaks, Alida
July 6 – Spring Valley, Mossbank, Assiniboia, Crane Valley, Chamberlain
July 10 and 11 – Cutknife, Battleford, Delmas, Handel, Landis, Unity, Wilkie
July 12 – Eatonia, Flaxcombe, Kindersley, Rosetown, Leader, Vonda, Oxbow
July 13 – Eston

The Eston area has received multiple storms. In most cases, if the first claim has not been adjusted, the adjuster will inspect the cumulative damage from both (or more) storms all at once.

In all three provinces, weather and wet field conditions are causing delays in adjusting claims. Growers are asked for their patience.

Claims slightly above average in Alberta

A total of just over 1,500 claims have been filed in Alberta, more than double the number from two weeks ago. This number represents straight hail claims only and does not include claims filed under crop insurance endorsements.

Major storm dates and locations include:
July 1 – Drumheller, Red Deer, Three Hills, Standard, Beiseker, Mossleigh, Trochu
July 3 – Red Deer, Wetaskiwin, Olds, Camrose
July 5 – Strathmore, Stettler, Lacombe, Standard, Milo
July 9 – Westock
July 12 – Consort, Oyen, Provost, Spruce Grove

Recent storms have had significant rainfall accompanying the hail ranging in amounts from two to five inches.
 

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The most significant storm to date in Alberta was on June 5 when hail was accompanied by a tornado in the southern part of the province. The areas affected were Taber, Wrentham, and Warner to Enchant. Seeding was early in this region so the hail caused damage to a number of specialty crops as well as conventional ones.

Southeastern Saskatchewan had a storm on May 22 that damaged winter wheat and some pulse crops. Most of the claims were around Oungre. On June 8 and 9, a few claims were filed as a result of storm activity in south central and southeastern Saskatchewan.

In Manitoba, claims were generated near Holland on May 27. There were also claims in early June in the southeast region of the province near Emerson, St. Jean Baptiste and Ste. Agathe. Claims are expected in parts of Alberta and Saskatchewan from hailstorms that occurred June 13.

Producer urged to make hail insurance decisions early

Although a few producers are still trying to get the last of their crops seeded and many others are busy with in-crop weed control, there are advantages to getting hail insurance in place as early as possible:

-It costs the same amount to insure early and the coverage is in effect longer.

-Early storms before insurance is purchased can limit the opportunity to subsequently purchase hail insurance coverage. Every year there are some producers who have hail storms in advance of getting coverage.

-Many companies have liability limits for specific townships, meaning they will only accept a certain amount of business. While industry wide capacity is not an issue, buying early means a wider selection of companies to choose from and therefore a better chance at the lowest insurance costs.

-Producers can continue to add hail insurance as the season progresses.

With this year’s reduction in unseeded acres, combined with solid commodity prices and the high cost of growing a crop, hail insurance uptake is expected to be strong. Producers can contact their local agents to discuss the various coverage options.

The Canadian Crop Hail Association represents the companies that sell crop hail insurance to producers in Western Canada. Starting on July 6 they will release a report every second Friday during the hail season to provide information on storms, claims and related issues.

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