Producers can expect to see higher crop insurance premiums for the 2024 crop year. The increase is mainly due to losses in 2021 and 2022.
“This year, we’re seeing the consequences of 2021 and 2022 conditions and the related losses,” explained Darryl Kay, Agriculture Financial Services (AFSC) chief executive officer. “As many producers are aware, 2021 saw historic claim payments and that had an impact on both the insurance fund balance and individual producer’s experience, which translates into higher premiums.
“We’re not trying to recover recent losses in a short period of time; rather, our premium framework takes a longer-term, 25-year approach. This longer view means greater premium predictability and stability for our clients.”
Commodity prices, one of the bigger drivers of recent premium increases, appear to have plateaued and have even decreased for most crops. Price-driven increases to premiums are not expected for many crops in 2024, except durum wheat and most pulse crops. Markets are difficult to predict so this expectation could change and will depend on what the market does for individual commodities.
Loss experience is the largest expected driver of premium increases for 2024.
Managing premium costs
Clients have options when it comes to managing their perennial and annual crop insurance premium costs. Price options are available under production-based insurance for hay as well as Moisture Deficiency and Corn Heat Unit insurance.
Coverage level options, from 50 to 80 per cent, are available for most commodities insured under AFSC’s production-based insurance products. AgriStability is also an option to consider, as it provides a whole farm margin protection for producers.
AFSC also provides a two per cent discount on accounts paid within 15 days of billing. Unpaid balances start accruing interest in September.
Clients are encouraged to contact their insurance relationship manager to discuss their situation and options on how to handle any premium increases while managing their risk.
“Each client’s farm is different, and things change from year-to-year,” said Kay. “It can be valuable for clients to discuss their operation and plans with their relationship manager to see if they can refine their risk management plan to better suit their situation.”
Other changes to crop insurance for 2024
While there are no major changes to AFSC’s crop insurance offerings for 2024, some smaller changes are being rolled out.
- New Crop Insurance Initiative – As of the 2024 insurance year, the maximum number of insurable acres in the New Crop Insurance Initiative will be 100 per cent of the acres that exist in the annual crop subscription (50:50 ratio).
- Accidental fire is being added as a cause of loss to products that did not have this coverage in the past. Clients who participate in products such as annual multi-peril insurance (without the Hail Endorsement), processing vegetable insurance, honey production insurance and hay insurance will benefit from the added coverage that will add accidental fire as a cause of loss for fire to the existing fire caused by lightning peril.
Clients can reach out to their preferred branch office to book at appointment with their relationship manager or contact AFSC through Live Chat on our website or AFSC Connect, call our Client Care Centre at 1.877.899.2372.