Surpassing $9 billion, indemnity payments set a new high in 2011, NCIS says.

Bill Kenealy-Insurance Networking News, January 25, 2012

Widespread droughts, flooding along the Mississippi River and deep freezes across the South combined to catalyze a record year for crop insurance claims.

New data from National Crop Insurance Services says $9.1 billion in claims were paid in 2011 and that the total may reach as high as $10 billion as the remaining claims are settled. The previous record of $8.67 billion was set in 2008.

“Two out of the last four years have seen the largest indemnity payments in history, all while the crop insurance industry was asked to do more with less,” NCIS President Tom Zacharias said in a statement. 

Zacharias noted the crop insurance program has seen $12 billion in cuts in Federal investment since 2008. “Thanks to the foresight of Congress, crop insurance has been in place to weather enormous natural disasters and help ensure that farmers survive to plant yet another year,” he said. “Those billions in damages would have landed on the plates of input suppliers, lenders, marketers and farm families if crop insurance wasn’t in place. Faced with decreasing federal funding, record payouts and high crop values, it is imperative that Congress not weaken the crop insurance infrastructure further as it writes the 2012 Farm Bill.”