The Department of Agricultural and Consumer Economics at the University of Illinois Urbana-Champaign released a 2012 loss ratios report to identify areas in which producers experienced high crop losses.
Higher loss ratios occurred last year in eastern Kansas and Missouri, as well as central and southern Illinois, western Indiana, and western Kentucky. Corn yield losses were most pronounced in these areas.
Areas in northeast Nebraska and southeast South Dakota, portions of southern and southwest Iowa, and parts of southern Wisconsin, northwest Illinois and east-central Iowa each experienced loss ratios above 4.00. Loss ratios at 3.00 and above – indicated as dark orange and red on the University of Illinois’ 2012 Crop Insurance Loss Ratios Map – had larger payments then total premium. Many areas reported low corn yields last year.
Less severe losses were reported in western Texas, eastern Colorado, southern Kansas, western Nebraska, eastern Wyoming and Montana. Loss ratios were relatively low in Minnesota, North Dakota and northern South Dakota.
A loss ratio is determined by dividing insurance payments by total premium. The University of Illinois reported the 2012 loss ratio experience differed from typical loss ratio experienced during non-drought years. According to Insurance Journal, a record $16 billion in crop insurance claims will be paid to farmers for 2012.
View the full report, including a map showing loss rations from 1995 to 2011, at www.farmdocdaily.illinois.edu. To speak with an agent regarding Midwest loss ratios or crop insurance questions in your neck of the woods, contact a Peoples Company representative today.