The crop hail industry paid out near record payments on the prairies for 2021. Recording more than 12,000 claims, industry payments to prairie producers will total more than $322 million – an amount not seen since 2008. Producer premiums totaled more than $309 million for an industry loss ratio of 104 percent. This loss will impact the balance sheet of most participating companies.

Prairie farmers were optimistic when the seed went in the ground and it was time to purchase their crop hail insurance coverage. Dry conditions were widespread across the western prairies.  There were concerns going into the season after minimal fall moisture and little snow cover, but some timely early spring snow and rains brightened the outlook for seeding and provided hope.

Record dry was reported through southern Manitoba and a large portion of south and western Saskatchewan, as well as much of Alberta. The weather dried out quickly and with little to no reserve moisture and record heat, crops in areas soon started to suffer. By July hopes were dashed with extreme heat and drought like conditions across much of the prairies, resulting in plummeting yields. The hot and dry conditions made way for an early start to harvest. Grain prices remained at near or record levels throughout the summer and heading into harvest.

The industry set record-level sums insured of more than $8 billion as crop prices surged and spring looked promising. Producers continued to welcome industry rate declines in what continues to be a very competitive marketplace.

Storm frequency was below average in 2021. The number of days producing active weather fell below the 5-year average. Storm severity, or the cost per claim quickly built like the clouds that cause the hail. What looked to be an average storm season endured record high claim payments. All three prairie provinces had average cost per claims higher than the 5-year average. The industry saw record loss payments from the activity with storm severity (average per claim) up 78 percent compared to the 5-year average.

With the lack of moisture, the western prairies received less-than-average storm days throughout the summer, but storm severity made up for the decrease in storm days. The summer started off slow with June seeing storm activity down 25 percent from the 5-year average.  July continued with limited active weather. However, the limited storms produced in July were the start to what was to become an expensive claim season.

Hardest hit was Saskatchewan with an industry loss ratio of 134 percent compared to 2020’s 65 percent.  Alberta followed with a 97 percent loss ratio, compared to 75 percent in 2020.  Manitoba was the only province to record a positive year with a loss ratio of more than 26 percent.

The isolated severe storm tracks brought moisture to localized area producers, but the severity left little if any crop, or time for crop recovery, to an already dismal production.

The Canadian prairie storm season runs June through October. This year June and July saw limited storm activity with active storm days down by about 20 percent overall compared to the 5-year average. August activity picked up becoming more average. September, with harvest in full swing across the prairies, recorded lower than average activity. Despite the lower activity across most of the summer, claim frequency (claims to policy) ended up being down by only 4 percent compared to the 5-year average.

Alberta crop hail results clouded with storm activity

Alberta’s storm activity resulted in heavier-than-average loss expense for the industry. The claim to policy ratio was 25 percent above the 5-year average. Average cost per claim saw an increase of more than 21 percent of the 5-year average. The industry reported 9 major storm days in July and August, resulting in more than 1,200 claims and costing more than $56 million.

Alberta’s costliest day was August 31 with more than 600 claims resulting in more than $20 million being paid. Following a close second was July 22 with 495 claims and a total payout of over $17 million. Total hail payments for 2021 were more than $82 million the most expensive since 2016.

Total sums insured saw a small increase from 2020, with average rates charged reporting a slight increase, likely due to continued declining industry results.

Saskatchewan records largest crop hail payouts since 2008

This year’s hail losses rivaled the worst ever recorded for the industry, with loss payouts of more than $224 million. Only 2008 recorded higher claim payouts. This resulted in an industry loss ratio more than 130 percent.

The season had an early start on June 5 with a west central storm. However, the reminder of the summer saw limited but costly storm dates. The industry reported 4 major storm dates in July with more than 2,600 recorded claims costing more than $98 million.

August which saw a more average storm activity month recorded 5 major storm dates. It was August 31 and September 1 that pummeled the industry to its final loss numbers. With almost 1,800 claims and a cost of more than $43 million, this storm was still only the second worst of the season.

The single largest loss day was July 22 with more than 1,300 claims at a cost of more than $53 million. July accounted for more than 43 percent of claims paid for the year.

With the number of claims-to-policies being 12 percent higher than the 5-year average, it was really the severity of the damage that devastated the industry. The average cost per claim was more than double the 5-year average.

Total sums insured saw a slight increase year-over-year, likely due to the increase crop prices and early crop outlook prior to the drought and heat like conditions. With the industry average rate charged continuing to decline for 2021, the current average rates are now at or near their lowest historic levels.

Manitoba records sunny results for the hail industry

Seeding was mostly complete by early June. The absence of rain was a concern early after a dry winter. With below average precipitation through June, and some frost and pest concerns, crops had a below average start.

Manitoba’s hail season did not really get underway until mid-July. The dry summer provided little convective weather to produce storm activity. The industry reported only 4 major storms in July resulting in 419 claims with a payout of $6.4 million.

Historically July is one of the most active months. With the dry weather throughout the summer, Manitoba recorded below average claim activity. The number of claims to policy was down 66 percent from average.  Hail frequency (active weather) was down about 15 percent from average. The average cost per claim (severity) was up about 23 percent compared to the 5-year average.

Total claim payments were more than $15 million, comparable to 2020, resulting in an overall loss ratio of 26 percent. Industry reporting sums insured were up about 10 percent. The industry average rate charged saw a minimal decline, likely due to the historic loss results and the continued competitive nature of the industry.

Who we are:

The Canadian Crop Hail Association (CCHA) has been serving the crop insurance industry in one form or another since 1915. It is a member-driven organization that represents the interests of the Canadian Crop Hail managing general agencies and insurance companies. CCHA member companies write Crop-Hail insurance product totaling more than $300 million in premium, and liability totaling more than $8 billion. Our companies service agriculture producers in the western prairies. These private and government organizations together provide a risk management tool to the Western Canadian prairie farmer. Members are Additional Municipal Hail Ltd. (Saskatchewan), AG Direct Hail Insurance Ltd, Agriculture Financial Services Corporation (Alberta), Canadian Hail Agencies Inc, Co-operative Hail Insurance Company, Manitoba Agricultural Services Corporation Rain and Hail Insurance Service Ltd., New Brunswick Agricultural Insurance Commission and Palliser Insurance Company Ltd.

 

A series of severe storms produced hail as large as golf balls, high wind and a tornadic event that damaged crops across Western Canada, according to the Canadian Crop Hail Association.

The storms ended months of dry weather and created challenging conditions for harvest. Insurance adjusters are working around the clock to complete claims ahead of the combines.

CCHA member companies are investigating more than 1,467 claims of crop damage from storms that occurred Aug. 21-28.

Darryl Tiefenbach, of Additional Municipal Hail, said storms damaged canola, wheat, soybean and other crops in the Saskatchewan communities of Kindersley, Rosetown, Biggar, Saskatoon, Abbey, Assiniboia, Moose Jaw, Cupar, Melville, Moosomin, Watson and Spalding.

“We expect there will be some areas as heavily damaged as we have seen throughout the 2021 hail season so far,” he said.

Brendan Blight, of Manitoba Agricultural Services Corporation, said storms damaged crops with pea size hail in the Manitoba communities of Boissevain, Souris, Brandon, Mcauley and Hamiota.

“Harvest is underway and we will have to work to stay in front of the combines,” he said.

Scott McQueen, of Palliser Insurance, said storms damaged canola and cereals in all Saskatchewan, Manitoba and Alberta with pea-to-golf ball size hail.

“Some severe damage to both cereals and canola was reported,” he said. “Standing canola was hit hard in both Saskatchewan and Alberta. Poor crop condition in many areas is contributing to well above average hail payouts.”

Tyson Ryhorchuk, of Rain and Hail Insurance Service, said storms damaged canola, wheat, barley and corn with pea-to-marble size hail in the Saskatchewan communities of Tantallon, Esterhazy, Melville, Rosetown, Kindersley, Brock, Unity, Plenty, Dodsland, Cut Knife and the Manitoba communities of Virden, Kola, Dunrea and Killarney.

“Wet conditions have slowed progress on claims adjusting,” he said. “Please be patient for adjusters, as they are working around the clock to complete claims. If you need to harvest your fields, please be sure to leave adequate strips for adjusters as set forth by the company.”

Murray Bantle, of Co-operative Hail Insurance Company, said storms damaged canola and cereals in the Manitoba communities of Brandon, Minto and Baldur.

“With 95 percent of our August claims adjusted so far in Manitoba, the number of claims is below the 5-year average as are days with storm activity,” he said. “Our average per claim remains just slightly below the 5-year average.”

In Saskatchewan, Bantle said storms damaged crops with pea-to-ping pong ball size hail. He said wind and a tornadic event are factors in adjusting for crop damage.

“August 23 through August 29 was a week of unsettled active weather heavily damaging many ripe crops across the province,” he said. “With little to no rain over the previous two months this last week of August has quickly added some topsoil moisture. Producers were into the beginning of an early harvest on dry and droughted crops. However, this moisture quickly put a stop to further progress.”

He said 31 percent of August claims are adjusted in Saskatchewan.

“So far our number of claims is below the 5-year average,” he said. “The number of days with storm activity is below the 5-year average as well.  The average per claim so far is above the 5-year average.”

Cassandra Holt, of Canadian Hail Agencies, said storms damaged crops in the Alberta community of High River. In Manitoba, she said storms damaged crops south of Brandon. Holt said Storms damaged crops in the Saskatchewan communities of Kindersley, Rosetown, Prelate, Abbey, Fiske, Blumenhof, Fort Qu’appelle, Moose Jaw, Balcarres, Bigger, Plenty, Outlook, and Stornoway.

Brenda Ebeling, of Agriculture Financial Services Corporation, said storms damaged crops in the Alberta communities of Atmore, west of Rocky View, west of Rosebud west of Strathmore, Standard, Hussar, west of Finnegan, southwest of Coronation, east of Blackie and southwest of Bassano.

Storms damaged crops across much of Western Canada as harvest continues, according to the Canadian Crop Hail Association.

The association is urging farmers to leave enough damaged crops in the field to allow adjusters to process claims.

“Remember to leave adequate samples if you are harvesting your crops prior to an adjuster arriving,” said association President Scott McQueen of Palliser Insurance Company. “If you need more information on what to leave, please contact your insurance provider.”

The storms occurred Aug. 3-9

CCHA member companies are investigating more than 327 claims of crop damage during the time period.

McQueen said storms damaged crops in central to northern Alberta and central to northern Saskatchewan. The damage ranged from light to medium.

“We are seeing lots of wind damage along with hail in certain areas,” he said.

Cassandra Holt, of Canadian Hail Agencies, said storms damaged crops in the Alberta community of Drumheller.

Murray Bantle, of Co-operative Hail Insurance Company, said storms damaged cereals and oilseeds in northwest Saskatchewan from Unity to North Battleford. Damage was ranged from light to heavy.

“The completed claims, or claim severity in Saskatchewan, remains well above the 5-year average for our company,” he said. “With the dry crop conditions, hailstorms have taken their toll on the standing crops. Harvest has started on the pulse crops of peas and lentils, with the dry hot conditions advancing harvest quickly in the southern part of the province.”

Ellen Grant, of AG Direct Hail Insurance, said storms damaged crops in the Alberta communities of Cherhill, Barrhead, Three Hills, Red Deer County, Beiseker, Olds, Rockyview, Del Bonita, Drumheller, Acme and Magrath.

Jackie Sanden, of Agriculture Financial Services Corporation, said storms damaged crops in the Alberta communities of Fort Assiniboine, southwest Barrhead, Vega and Neerlandia. They also damaged crops in Crossfield, Rocky View, Three Hills, Wimborne, Finnegan, Acme, Alix and Innisfail.

Darryl Tiefenbach, of Additional Municipal Hail, said storms damaged crops in the Saskatchewan communities of Rosetown, North Battleford and Glaslyn. Damage was moderated, he said.

“We are currently adjusting the July 22 storm date in all areas affect by this largest hail event of 2021,” he said. “We will have all claims for this storm date adjusted in the next 8-10 days.”

Brendan Blight, of Manitoba Agricultural Services Corporation, said storms damaged crops with pea sized hail in the Manitoba communities of Deloraine, southeast of Dauphin, Lyleton and north of Altona.

He said low rainfall has stressed crops across the province.

“Damage is minor for the most part,” he said. “There are reports of larger damage and stones north of Altona from the evening of August 9 but we are still fielding phone calls and do not have firm claim numbers yet.”

For more information and past reports: cropinsuranceincanada.org

The Canadian Crop Hail Association (CCHA) has been serving the crop insurance industry since 1915. It is a member-driven organization that represents the interests of the Canadian Crop Hail managing general agencies and insurance companies. These private and government organizations together provide a risk management tool to the farmers across Canada. Members are Additional Municipal Hail Ltd. (Saskatchewan), AG Direct Hail Insurance Ltd, Agriculture Financial Services Corporation (Alberta), Canadian Hail Agencies Inc, Co-operative Hail Insurance Company, Manitoba Agricultural Services Corporation Rain and Hail Insurance Service Ltd., New Brunswick Agricultural Insurance Commission and Palliser Insurance Company Ltd.

Prairie farmers continue to insure their crops for hail damage at near record levels. 2020 was a below the 5-year average for claims but endured higher than average claim payments. Overall, the industry will record a near breakeven type of year. Claims produced insurance payouts of over $192 million on over 12,100 claims in Western Canada. Producer premiums totaled just over $300 million for an industry loss ratio of 64 percent.

Timely rains and good seeding conditions gave producers some early hope after a poor fall harvest.  For some areas, the weather dried out quickly.  Reserve moisture helped many producers across the prairies. Some crops did suffer from insufficient moisture and excess heat.  Indications are that crops range from excellent to average for the most part.  With industry premiums decreasing an average of 15% over the past 5 years, producers welcome one of the few declining agricultural input costs.

Some parts of the prairies received less than average storm days throughout the summer, but storm severity made up for the decrease. July storms caused havoc across Alberta and Saskatchewan.  But a single-day late August event in Saskatchewan was costly to ripe crops.  Manitoba was spared after 2 years of higher-than-average losses.  Activity was widespread around the prairies.

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

After a year of contrasts and challenges producers welcomed the ideal seeding conditions.  2019 poor harvest conditions provided much needed sub soil moisture to help get the 2020 seeding year off to a great start.  Summers timely rains for many provided what looked to be above average crop conditions.  A warm dry fall provided many straight days of harvest allowing producers to reap the benefits of the growing season.

The summer was mostly average for the number of storm days.  The storm season was spread mostly through June to August.  September was spared allowing producers to finish up harvest.  Claim frequency (Claim to Policy) was down 4% from the 5-year average. Storm severity (Average per Claim) was up 10% from the average.

Alberta hail claims result in second straight year of negative results

Alberta’s storm activity resulted in similar activity to 2019 for the industry. An early severe storm that pummeled the city of Calgary also caused crop damage, however, early crop recovery helped lessen industry losses.  Claim activity was up over 26% compared to the 5-year average, while claim severity at more than $20,000 per claim was higher by more than 20% compared to the average.  Total hail payments for 2020 were reported at just over $69 million.  The overall reported loss ratio was 83%.  Total sums insured increased for 2020, with rates appearing to stabilize.

Saskatchewan reported average loss year

Saskatchewan saw a decrease in storm activity compared to 2019. A late August storm dampened what was looking to be a light hail season for industry insurers. The late storm on harvest ready crops was the most expensive of the year.  Claim activity was down 1% compared to the 5-year average, while claim severity at $13,000 per claim was a decrease of about 15% compared to average.  Total hail payments for 2020 were reported at just over $163 million.  The overall reported loss ratio was 65%.  Total sums insured increased for 2020, with average rates continuing to soften.

Manitoba records light hail activity for 2020

Manitoba recorded a decrease in storm activity compared to 2019. Little storm activity resulted in positive results for the province.  Claim activity was down 59% compared to the 5-year average, while claim severity at $9,900 per claim was down 22% compared to the average.  Total hail payments for 2020 were reported at over $15 million.  The overall reported loss ratio was 29%.  Total sums insured decreased slightly for 2020, with average rates decreasing slightly as well.

Who we are: The Canadian Crop Hail Association (CCHA) has been serving the crop insurance industry since 1915. It is a member-driven organization that represents the interests of the Canadian Crop Hail managing general agencies and insurance companies. These private and government organizations together provide a risk management tool to the farmers across Canada. Members are Additional Municipal Hail Ltd. (Saskatchewan), AG Direct Hail Insurance Ltd, Agriculture Financial Services Corporation (Alberta), Canadian Hail Agencies Inc, Co-operative Hail Insurance Company, Manitoba Agricultural Services Corporation Rain and Hail Insurance Service Ltd., New Brunswick Agricultural Insurance Commission and Palliser Insurance Company Ltd.

Milder weather resulted in fewer damaging storms across western Canada as harvest nears the halfway mark in some places, according to the Canadian Crop Hail Association.

The storms occurred Sept. 4-11.

CCHA member companies are investigating more than 16 claims of crop damage during the time period.

Murray Bantle, of Co-operative Hail Insurance Company, said storms damaged oilseeds in the Manitoba communities of Benito and McCreary.

“Only small scattered thunderstorms this week for Manitoba,” he said. “Our August claims in Manitoba are 94 percent complete at this time.”

In Saskatchewan, storms damaged oilseeds and cereals in Bethune, Lucky Lake, Nipawin and Wilkie.

“Scattered thunderstorm activity caused damage on ready-to-harvest crops,” he said. “We are asking growers to make sure to leave adequate samples to adjust from. Harvest is now nearing 50 percent complete according to the provincial crop report. August storms are now 90 percent adjusted in Saskatchewan.”

Jackie Sanden, of Agriculture Financial Services Corporation, said storms damaged crops in the Alberta communities of La Glace, Pincher Creek, Calmar and Thorhild.

Cassandra Holt, of Canadian Hail Agencies, said storms damaged crops in the Alberta community of Westlock. In Saskatchewan, storms damaged crops in Norquay.