MCIC Annual Report 2004/05 - Manitoba Agricultural Services ...

FIGURE 4
ACRES INSURED
PRODUCTION INSURANCE PROGRAM (MILLIONS)
10
9
8
7
6
5
4
3
2
1
0
The 2004-05 total premium after discounts was
$85.1 million on $1.1 billion of coverage (liability).
Indemnity payments for the year totalled $197.7
million, the highest amount in MCIC’s history.
However, based on the size of the program
(i.e. loss ratios), 2004-05 had the fifth largest
payment in MCIC’s history. A historical summary
of net premiums and indemnities is shown in
Table 5 (Page 19), with the most recent five years
illustrated in Figure 5.
FIGURE 5
TOTAL PREMIUMS AND INDEMNITIES
PRODUCTION INSURANCE PROGRAM ($ MILLIONS)
200
180
160
140
120
100
80
60
40
20
0
2000-01 2001-02 2002-03 2003-04 2004-05
2000-01 2001-02 2002-03 2003-04 2004-05
After accounting for interest revenue of $8.0 million,
reinsurance premiums of $13.6 million and
reinsurance recoveries of $31.0 million, MCIC
recorded an $87.4 million loss for 2004-05. This
resulted in retained earnings decreasing from
$320.3 million to $233.0 million.
Hail Insurance Program
A separate policy covering spot loss hail damage is
available to producers enrolled in Production
Insurance. Producer premiums fund all of the costs
of the Hail Insurance Program, including
administrative expenses. Premium rates are
calculated using the Production Insurance Program’s
risk areas, rather than by township as is the case for
private hail insurance. Coverage can be selected at
any time during the growing season and is available
in various dollar amounts depending on the crop.
The Hail Insurance Program also provides coverage
for losses due to accidental fires.
In 2004-05, MCIC insured 2.8 million acres, with
total coverage of $310 million. Premiums prior to
discounts were $11.4 million, with indemnities of
$4.8 million. The resulting loss ratio (indemnities
as a percentage of gross premiums) was 42%.
Figure 6 provides a summary of the Hail Insurance
Program’s loss experience over the last five years.
FIGURE 6
TOTAL PREMIUMS AND INDEMNITIES
HAIL INSURANCE PROGRAM ($ MILLIONS)
12
10
8
6
4
2
0
2000-01 2001-02 2002-03 2003-04 2004-05
PREMIUMS
WRITTEN (GROSS)
INDEMINITES
PAID
MANITOBA CROP INSURANCE CORPORATION
PREMIUMS
WRITTEN (NET)
INDEMINITES
PAID
13