USA – California drought: Recent above-average rain no help The U.S. Drought Monitor released July 23 reflects improvements in drought conditions for the Southwest U.S. But the recent above-average rain in California has “had little impact on the overall drought situation in the state.” During the weekend, residual moisture associated with Hurricane Dolores fueled showers […]
The sum of premiums collected in 2006 was 4,57 billion USD. Most premiums were collected on corn (appr. 35%), soy beans (20%), wheat (15%) and cotton (10%) insurance contracts. RMA representatives indicated that nursery insurance becomes an important line of crop insurance program. Farm-level revenue plans (crop revenue insurance, revenue assurance and income protection) are the most popular with farmers. Revenue plans supply over 60% of premiums collected on the agricultural insurance program. Farm-level yield plans (actual production history and grower yield certification) provide about 20% of the premiums. Group risk income protection is the third important insurance plan providing about 10% of the premiums collected.
We explore two theories that have been advanced to explain the patterns in U.S. catastrophe reinsurance pricing. The first is that price variation is tied to demand shocks, driven in effect by changes in actuarially expected losses. The second holds that the supply of capital to the reinsurance industry is less than perfectly elastic, with the consequence that prices are bid up whenever existing funds are depleted by catastrophe losses.
The USDA announced the implementation of two disaster assistance programs that will help ranchers and beekeepers recoup production losses as a result of drought and disease. The Livestock Forage Disaster Program, or LFP, provides payments to eligible producers who suffered livestock grazing losses due to qualifying drought or fire between Jan. 1, 2008, and before Oct. 1, 2011.
The era of cheap food is over. The price of corn (maize) has doubled in a year, and wheat futures are at their highest in a decade. The food price index in India has risen 11 per cent in one year, and in Mexico there were riots in January after the price of corn flour (used in making the staple food of the poor, tortillas) went up fourfold. Even in developed countries food prices are going up, and they are not going to come down again.
Farming is too risky for insurers and reinsurers to cover alone. That was the message from the International Cooperative and Mutual Insurance Federation's 16th meeting of reinsurance officials in Athens, when delegates said government help is needed to provide adequate cover for European farmers. The high risk nature of agricultural production means insurance is too expensive for farm budgets, yet producers' exposures are too high without it. Consequently, leading reinsurance industry figures believe governments should subsidize coverage to help EU farmers compete with their wealthier US counterparts.
Guy Carpenter company presentation - Global Agriculture Insurance & Reinsurance Market Overview (July 2006). Background – The changing role of Government / the World Market. Overview of Mature Crop Insurance Systems – U.S. & Canada. Recent Market Developments – North America. Global Agriculture Market Premium Volume Estimates. Brief Overview of the Agriculture Reinsurance Market Global Agriculture Insurance & Reinsurance Market Overview
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