Saskatchewan Municipal Hail Insurance paid $62 million to producers last year, president Wayne Black told the recent Saskatchewan Association of Rural Municipalities conference.
That amount comes from 5,297 claims.
“It hailed every day throughout the month of July,” said Black.
Early that month, the Assiniboia region was hard hit and crops didn’t recover well because of hot, dry weather.
“At the same time, the northeast endured the largest hail storm ever recorded,” he said.
The storm began along Highway 16 near Lanigan and moved northeast between Melfort and Tisdale all the way to the forest past Carrot River. Black said crops recovered better from this storm thanks to better moisture conditions. Many in its path wouldn’t typically buy hail insurance, he said.
Losses in July cost more than $37 million on 1.4 million acres.
“August was only slightly better with hail occurring on 28 of the 31 days in August and during that month municipal hail received claims on about 750,000 acres of crop land and losses of about $20 million,” Black said. “Hail activity slowed in September, as it normally does, with losses on about 150,000 acres and about $3 million worth of damage.”
The basic indemnity under SMHI last year was $25 per acre to a maximum of $275. For 2021 that maximum rises to $300.
“This limit is set by a formula created by the provincial government, which somewhat restricts the ability of the board of municipal hail to manage the affairs of your company,” Black said. “We will continue to have ongoing discussions… regarding our concerns with the design and application of the formula.”
In 2020, SMHI also paid out on 25 fire claims for about $132,000, he added.
The company saw positive revenue of about $13 million, based on an $8 million underwriting gain and $5 million in interest on investments.
“This makes up for just over half of the $21.5 million in losses incurred by the company in the two previous years,” he said.
Insurance through additional municipal hail is available as a top-up to SMHI or to farmers on rented land. Last year on a combined basis SMHI provided coverage worth $2.75 billion, or 54 percent of the hail insurance purchased in Saskatchewan.
Through a subsidiary, the company also insured about 500,000 acres in both Alberta and Manitoba.
Black said SMHI remains strong heading into 2021.
He noted the average charge rate for hail insurance has dropped by 46 percent in the last 10 years.
“We believe we have led the industry in reducing or eliminating crop surcharges on most crops over that same period of time,” he said, adding he expects no changes to surcharges and very little if any change to charge rates for this year.