How They Started: State Farm Insurance

Source: Jayleen R. Heft, PropertyCasualty360.com

State Farm was founded in 1922 in the small farming town of Bloomington, Ill. G.J. Mecherle, the founder of the company, didn’t think it was fair that he and his fellow farmers and families in rural communities paid the same auto insurance rates as those in Chicago.

state-farm-gj-mecherle-beginningsJust days after the company opened its doors, a new policyholder collided with another vehicle. State Farm had its first claim, and along with it, the opportunity to deliver on the company’s fundamental promise to be there when the unexpected happens. And so it did, paying the claim the very next day and earning a lifelong customer.

With more than 84,000 agents and employees, the company serves over 80 million policies in the U.S. and Canada today.

Photo: State Farm founder G.J. Mercherle (Image from Statefarm.com)

Farm supports may kick in $1B for Alberta

Barbara Duckworth — Calgary bureau

Alberta may pay close to $1 billion in support payments to farmers this year as crops succumb to drought, grasshoppers and hailstorms.

But other than some additional help for livestock producers, any help will come through existing farm programs.

“We are in a drought,” Alberta agriculture minister Oneil Carlier said at a news conference.

Beyond farm programs, further help for livestock producers who are short of feed and water was announced at the Aug. 6 conference.

Fees will be cut by 50 percent for the emergency water pumping program, retroactive to April 1.

The department of environment has agreed to open unused Crown lands for haying and grazing if there is water and if fences can be built. If a leaseholder is not fully using a grazing allotment, sub-leases will be allowed.

About 800 tonnes of hay have already been harvested from unoccupied Crown lands and additional land has been leased.

And previously, the federal government announced tax deferrals for western Canadian cattle producers who had to sell off breeding herds. However, a wide scale sell off does not seem apparent, said deputy minister David Burdek.

Year-to-date sales volumes are below the number recorded at this time last year and are well below the 30-year average. More might be sold once producers assess their winter feed supplies.

For crops hit by the dought, four programs already in place, including crop insurance, should deliver help if yields fall by a predicted 25-30 percent of normal. About one-third of canola acres and 28 percent of hard spring wheat acres are rated as poor.

Crop insurance has paid out $70 million on 3,000 claims so far this year.

“I believe with the programs we have in place, the agri-insurance program at AFSC (Alberta Financial Services Corp.), will go a long way and it is well subscribed to by producers in the province. It will go a long ways to getting that help they need,” said Carlier.

If current trends continue, $700-$900 million in direct support could be paid to farmers by the end of the growing season, he said.

Besides drought, two nights of hail storms and high winds on Aug. 4 and 5 struck down crops from Calgary to Gem, Alta. The following day a storm front travelled from west of Olds to Strathmore and caused significant damage, said Merle Jacobson, head of Alberta Financial Services Corp., which administers the provincial farm support programs.

But drought remains the major problem. Estimates indicate about 80 percent of Alberta farmers will experience some degree of loss due to the dry weather. Conditions throughout the province are highly variable due to spotty rains. Some may see a small yield loss while others face a total writeoff.

“When we look at the 80 percent that are affected, probably close to half are impacted 50 percent or greater. Those are the ones we are focusing our efforts on,” said Jacobson.

This year’s weather is similar to conditions experienced in 2009, as opposed to the drought of 2002, which was the worst in more than 100 years.

In 2015, farmers took out some of the highest-ever levels of crop insurance coverage. About 80 percent of the seeded acreage, or 14.7 million acres, has been insured for $3.68 billion.

About 6.4 million pasture acres or 29 percent of the pasture acres were insured for $79.9 million.

Hay insurance is available for crops such as alfalfa, legumes and grass. Producers insured 300,000 acres of hay in 2015 with $24.3 million in coverage. Approximately six percent of hay acres are insured in the province, similar to the rate across Canada.

Insurance payouts to drought-hit farmers will likely near $1 billion

BY JODIE SINNEMA, EDMONTON JOURNAL

EDMONTON – Insurance payouts could likely near $1 billion this year for the 80 per cent of Alberta farmers hit hard by this year’s drought, provincial agriculture representatives said Thursday.

Crop insurance programs have already paid out $70 million to farmers who have lost crops to drought, grasshoppers or hail. That number is expected to rise to between $700 million and $900 million as farmers head into harvest and file claims. That estimate is based on the best, most optimistic weather forecasts, so if there are more hail storms or an early frost, the number will rise.

Last year, when many farmers harvested bumper crops, the same programs paid out $371 million.

A $2-billion reserve fund in the Agriculture Financial Services Corporation’s insurance program, collected through premiums over the past 10 years, will cover the additional costs so neither the province nor taxpayers will have to foot the bill.

“There is no doubt that the early snow melt, dry spring and recent hail storms have taken a toll,” Agriculture and Forestry Minister Oneil Carlier said Thursday.

“While significant rainfall in July has provided some relief to portions of the province, we know that areas of the province remain very dry and some producers are still struggling.”

The rain has been spotty, with some farmers growing fairly good crops while their neighbours’ crops are stunted. In general, the worst hit areas are in northern Alberta in the Peace Country region, counties north of Edmonton, a strip in the province’s southeast and near Cypress in the south. Three counties added their names Thursday to the areas declaring agricultural emergencies, bringing the total to 17 counties declaring severe drought states. About two-thirds of those counties are north of Edmonton, including Lac Ste. Anne and Westlock, Thorhild and Sturgeon counties.

About 80 per cent of Alberta farmers are expected to feel the drought’s financial impact, with half of those likely taking in half the typical crop.

“What does that look like? If you take it where half your revenue from the year is gone, that’s really what it comes down to,” said Merle Jacobson, chief operating officer for Agriculture Financial Services Corporation, which administers the insurance programs for farmers. “It really makes it a challenge.”

The province estimates crop yields will be 25 to 30 per cent smaller than the average over the past five years. That’s similar to the drought in 2009, but less severe than the one in 2002 that devastated large areas of the province.

To help out beyond the typical insurance programs, the province is working with municipalities to find underused Crown land that hard-hit farmers could sub-let to feed their animals. Farmers filling up their dugouts and reservoirs with water pumped from provincial lakes and rivers will also pay half the rental fees they usually do, with the reduced pumping fees retroactive to April 1. About 50 people have used the water pumping program this year, although the province is prepared to see up to 1,400 clients coming forward to fill dugouts for cattle.

READ MORE HERE: Insurance payouts to drought-hit farmers will likely near $1 billion

Insurance payouts

Last year, when stellar crops created an ideal year, the Agriculture Financial Services Corporation spent $371 million on several crop insurance programs. That amounted to 50 per cent of premiums brought in.

During the last significant drought in 2009, insurance payouts amounted to about 111 per cent of premiums paid.

In 2002, during a one-in-100-year drought, insurance payouts were just shy of 400 per cent of premiums.

This year’s drought insurance payout is estimated to be 120 to 125 per cent of premiums.

Western Canada’s drought is taking a toll

Source: www.edmontonjournal.com

Record-breaking temperatures and extremely low rainfalls across Western Canada are causing chaos for farmers and firefighters this summer as they grapple with the worst drought in more than a decade.

The widespread hot and dry conditions in B.C., Alberta and Saskatchewan have led to a jump in wildfires, tight water restrictions, and pressure on farmers as many crops remain stunted and the cost of hay skyrockets.

And while some rain sprinkled over the largely bone-dry Prairies this week, it may be too little too late for the western provinces to fully recover before the summer ends.

Plans to help the dry provinces cope with the drought have already been initiated. On Thursday, Agriculture Minister Gerry Ritz announced the federal government would grant tax deferrals to livestock producers in regions affected by drought.

On the same day, with smoke billowing from a hillside behind him, Prime Minister Stephen Harper vowed to take a hard look at new ways to fight devastating wildfires like the one raging near West Kelowna, B.C.

In Alberta, several counties have declared states of agricultural emergency. In Saskatchewan, crop insurance rules are being loosened to help the anxious farmers. In British Columbia, water restrictions have been imposed while “drought shaming” grows on social media.

And it’s prompting many people to ask just what’s going on.

“Is it climate change? I don’t know. It may just be a fluke, it may just be something coincidental, it’s hard to say,” says David Phillips, senior climatologist with Environment Canada.

He says although many people have associated the lack of rain in the region with El Niño — a climate event that happens when warm water in the Pacific Ocean interacts with the atmosphere — it may actually be connected to a mass of warm water in the Pacific Ocean that originated in the Gulf of Alaska and moved down the coast to British Columbia. It’s been dubbed the “Pacific blob.”

“(It) could have contributed to weather blocking, which prevents normal processing of precipitation events, over the western provinces,” Phillips says, adding it also could have brought wetter weather in the east.

“What we’re seeing now is conditions go from one extreme to the other,” Phillips says. “Some parts of the Prairies last year were the wettest on record. This year, we’ve seen the opposite.”

He calls it “weather whiplash.”

“That seems to be a common thing that we’re seeing around the world, where normal doesn’t exist anymore.”

READ FULL ARTICLE HERE:

Yangtze capsize ship insurance payout estimated at $14.9 million – Xinhua

Source: uk.reuters.com

China‘s insurance regulator estimates the payout in the fatal Yangtze cruise ship capsizing last week, which killed more than 400 people, at around 92.5 million yuan (9.62 million pounds), the official Xinhua news agency reported on Wednesday.

The China Insurance Regulatory Commission (CIRC) told a conference on Wednesday that insurance firms underwrote 340 contracts for parties involved with the accident, ranging from shipowners and travel agencies to passengers and crew members.

Another official media outlet, the Shanghai Securities News, reported on Thursday that the ship, owned by Chongqing Eastern Shipping Corporation, was insured for by 15.7 million yuan by the People’s Insurance Company of China (PICC) (1339.HK).

The Chongqing branch of PICC has paid 10 million yuan to Chongqing Eastern Shipping Corp so far, said the paper.

It said CIRC’s estimates also included 12 million yuan of liability insurance for travel agencies, 61.7 million yuan of personal insurance for 396 passengers and 3.12 million of personal insurance for 18 crew members.

The four-deck Eastern Star was hit by a freak tornado on June 1 and capsized on the Yangtze River in one of China’s worst shipping disasters in nearly 70 years.

Subscribe To Our Newsletter

Join our mailing list to receive the latest news and updates from ILSTV

You have Successfully Subscribed!

Pin It on Pinterest