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AM Best: Premiums Surge for US Crop Insurers

For crop year 2021, the multi-peril crop insurance program covered more than 444 million acres, with an estimated value of more than $150 billion. See the Best’s Rankings list of US Multi-Peril Crop – Top 20 Carriers – 2022 Edition.
  • September 2022

Editor's Note: The following is an excerpt from the Best's Market Segment Report: US Crop Writers Benefit from Rising Commodity Prices and Innovation. Visit to access the full report.

In 2021, U.S. crop insurers achieved favorable results, with record high premium volume, relatively benign weather conditions, and strong commodity pricing producing solid underwriting profitability. Commodity prices reached unprecedented levels and continued to rise throughout the growing season, diminishing the likelihood of indemnities on revenue policies, which make up the majority of the premium.

U.S. crop insurers play a critical role in delivering risk transfer solutions to America's farmers. The primary mechanism is the federal multi-peril crop insurance (MPCI) program, which provides agricultural producers in the U.S. protection against a broad array of naturally occurring perils, as well as commodity price declines. For crop year 2021, the MPCI program covered more than 444 million acres, with an estimated value of more than $150 billion.

Private crop products largely consist of crop hail insurance and other covers that are not government-subsidized. Crop hail insurance protects against damage caused by hail and fire, as well as wind or theft in certain markets. Private products can be combined with MPCI or other protections to reduce deductibles and increase coverage up to the actual cash value of the crop. Private crop policies are more flexible, as they can be purchased during the growing season.

Results for the MPCI segment have improved significantly the past two years, with solid underwriting profitability in 2021. A significant portion of the 2022 growing season is still to come and the potential for yield losses from a broad array of natural perils remains high. Claims activity as a result of significant commodity price volatility is possible. Crop insurers are an integral part of the agricultural community and are prudent managers of risk as it relates to geographic diversification, fund selection, precision analytics, risk modeling, and the use of third-party reinsurance. However, even as strong risk managers, the risk-reward trade that crop insurers accept will always be subject to wide variability as climate risk and commodity pricing have no boundaries.

2021 Premiums Surge

Premiums in 2021 reached record levels for both MPCI ($14.9 billion) and private products ($1.3 billion). MPCI rates are closely tied to agricultural commodity futures prices and their implied volatility. Since 2019, commodity prices have risen significantly, driving the increases in the MPCI rates. In addition, the Risk Management Agency (RMA), part of the U.S. Department of Agriculture (USDA), implemented a new hurricane policy endorsement in 2020, with over $1 billion attributable to this new cover in 2021.

The Federal Crop Insurance Corporation (FCIC) reinsured 131 types of commodities under its reinsurance agreements for the 2021 crop year. The majority of MPCI premium is attributable to corn, which accounted for $5 billion of premium in 2021. The top four crops (corn, soybeans, wheat, and cotton) account for over $10 billion, or approximately 75%, of total MPCI premium. All other agricultural commodities insured are included in the remaining 25%. Commodity prices of the top four crops each had double-digit increases year-over-year, led by soybeans at 27.6%.

Texas led all other states with $1.4 billion of MPCI premium in 2021, about 10% of the entire MPCI program. Iowa and North Dakota both reported over $1 billion, followed by Illinois at $979 million. The Standard Reinsurance Agreement (SRA) assigns each state to one of three groups. Group 1, consisting of Illinois, Indiana, Iowa, Minnesota, and Nebraska, accounted for more than $4.1 billion of premium in 2021. The majority of premium, at $9.2 billion, comes from the 28 states in Group 2, led by Texas, North and South Dakota, California, and Kansas. Group 3 features the remaining 17 states, largely located in the Northeast region, as well as Utah, West Virginia, Wyoming, and Hawaii. These are significantly smaller markets for crop insurance products, with a combined $405 million of MPCI premium in 2021. Revenue products drive premium volume, with more than 70% of total premium attributable to this coverage type in each of the most recent five years. In 2021, $10.6 billion of premium came from revenue policies, 77% of the total.

In 2021, private products reached a record $1.3 billion of premium, likely a byproduct of farmers looking for risk transfer solutions after significant hail activity in 2020.

Best's Rankings

US Multi-Peril Crop — Top 20 Carriers — 2022 Edition

Carriers were ranked by 2021 multi-peril crop direct premiums written.

Rank AMB# Company Name DPW ($ millions) Market Share (%)
2020 2021 YoY
2020 2021
1 018498 Chubb INA Grp 1,934 2,643 36.6 17.9 17.7
2 005658 QBE North America Insurance Grp 1,636 2,517 53.9 15.1 16.9
3 018878 Sompo Holdings US Grp 1,919 2,376 23.8 17.7 16.0
4 018549 Zurich Insurance US PC Grp 1,584 2,241 41.5 14.6 15.1
5 004835 Great American P & C Insurance Grp 914 1,144 25.2 8.4 7.7
6 018171 FMH Insurance Grp 654 954 45.9 6.0 6.4
7 003116 Fairfax Financial (USA) Grp 597 867 45.1 5.5 5.8
8 018540 American International Grp 520 780 50.0 4.8 5.2
9 018733 Tokio Marine US PC Grp 527 701 33.1 4.9 4.7
10 018557 XL Reinsurance America Grp 163 179 10.2 1.5 1.2
11 004233 Farm Bureau Property & Casualty Grp 119 164 37.7 1.1 1.1
12 000302 COUNTRY Financial Property Casualty Grp 76 118 55.0 0.7 0.8
13 003133 American Agricultural Insurance Company 46 58 27.0 0.4 0.4
14 018887 Church Mutual Insurance Grp 38 43 14.4 0.3 0.3
15 018543 Nodak Insurance Grp 36 41 13.3 0.3 0.3
16 000088 State Farm Grp 24 32 29.6 0.2 0.2
17 004232 United Farm Bureau of Indiana Grp 15 23 54.3 0.1 0.2
18 002445 Rural Mutual Insurance Company 4 5 19.3 0.0 0.0
19 002903 Farm Bureau of Idaho Grp 3 3 12.7 0.0 0.0
20 018783 Aspen US Insurance Grp 17 1 -96.9 0.2 0.0
Total Multi-Peril Crop 10,826 14,888 37.5 100.0 100.0

Source: AM Best data and research

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