Skip to content
21 May 2013
US crop insurers, including QBE Insurance Group, are facing significant claims as the drought there worsens, say brokers and rating houses.
Some estimates suggest losses for claims on corn, wheat and soybean could top $US20 billion ($18.9 billion) this year.
Losses to crop insurers last year were $US11 billion ($10.4 billion), according to National Crop Insurance Services.
Hamilton Institute for Policy Research Senior Analyst Kyle Spencer says crop losses due to bad weather reached $10.7 billion ($10.1 billion) for the 12 months to April 30 this year.
“Up until now, the government-approved companies haven’t taken a loss writing crop insurance in a decade,” he said in a briefing note for the investor site Seeking Alpha.
Including QBE in a list of crop insurers experiencing a rising number of claims, he added: “Remember, the ratio of losses to premiums during the 1980s and ’90s was approximately $US2 for $US1.”
According to Morgan Stanley, QBE’s losses on crop insurance this year could be as high as $US270 million ($255.4 million).
Mr Spencer says QBE has yet to release estimates of the current drought’s impact on its earnings.
“In 2011, QBE’s earnings suffered disproportionately compared to its competitors in the industry,” he said. “A deeper hit in 2012 will begin to cast serious doubt on its risk model.”
A QBE spokesman told insuranceNEWS.com.au the company can’t comment on the US crop business due to its results blackout. The insurer will announce its 2012 half-year results on Friday.
Ace has estimated its exposure to the US crop season will be about $US68 million ($64 million) for the third quarter.
Wells Fargo, the largest crop insurer in the US, has written about $US1.8 billion ($1.7 billion) of business in states affected by the drought, with more than three-quarters covered by reinsurance, according to Mr Spencer.
15 May 2013
Do you have excellent customer service skills, experience in the administration field and have general insurance knowledge? Then we are looking for you!
8 May 2013
Extremely strong aggregating brand I Warm referrals I Manage existing relationships
6 May 2013
Full-time position I Great team environment I Bring your knowledge and skills to a company who values expertise
29 April 2013
An exciting opportunity exists to join Willis at the Sydney practice as an Account Manager, providing risk management and insurance advice to a broad range of insolvency practitioner clients.
23 April 2013
We are seeking a dynamic individual to lead a team of 170+ employees, delivering exceptional claims services to a range of customers nationally, while maintaining a focus on service standards, efficiency and effectiveness.
23 April 2013
This position offers a pathway smf training for the right person seeking a rewarding career in a specialty field within general insurance broking.