Prairie hail claims hit C$192 million in 2020

CCHA – Total hail claims across the Canadian Prairies came in below the five-year average in 2020, but claim payments were still reported to be above average, according to an update on the year from the Canadian Crop Hail Association.

Claims produced insurance payouts of over C$192 million on over 12,100 claims in Western Canada. Producer premiums totaled just over C$300 million for an industry loss ratio of 64 percent. The claims compare to 2019, when the industry issued C$242 million in payments on 16,200 claims.

Timely rains and good seeding conditions gave producers some early hope after a poor fall harvest in 2019. 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 ranged 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 two years of higher-than-average losses

Hardest hit was Alberta with an industry loss ratio of 83%, which was 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.

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 four per cent from the five-year average. Storm severity (Average per Claim) was up 10 per centfrom the average.

ALBERTA

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

SASKATCHEWAN

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 one per cent compared to the five-year average, while claim severity at C$13,000 per claim was a decrease of about 15 per cent compared to average. Total hail payments for 2020 were reported at just over C$163 million. The overall reported loss ratio was 65%. Total sums insured increased for 2020, with average rates continuing to soften.

MANITOBA  

 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 per cent compared to the five-year average, while claim severity at C$9,900 per claim was down 22 per cent compared to the average. Total hail payments for 2020 were reported at over C$15 million. The overall reported loss ratio was 29 per cent. Total sums insured decreased slightly for 2020, with average rates decreasing slightly as well.