Commodity Blog

Mon Jun 15, 2020

How Accurate Yield Forecasts Increase Profits for Crop Insurance Underwriters

Crop Insurance Underwriters need the best information available to make strategic business decisions. If you’re relying on only the USDA’s yield estimates your firm could be making underwriting decisions on out-of-date or incomplete data! Getting a better view on yield is an important component to building strong underwriting models – which rely on not just realized historical yield, but also historical variance and potential variance in calculating insurance premiums.

Yield Impact to Crop Insurance Underwriting

With yield estimates available at the county level insurance underwriters can estimate grain production and variance more effectively. With more risk insights available, it allows underwriters to price more aggressively and accurately than just relying on USDA published information. Additionally, with our demonstrated ability to inform the direction of USDA estimates, underwriters can opportunistically hedge their book to improve their loss ratio across their entire portfolio!

Coverage for Yield Forecast Indexes

In addition to the Yield Forecast Indexes with County, CRD, State, and National benchmarks for Corn, Beans, and Wheat, you can more precisely structure your contracts to reflect where grain trades in each underwriting area. Stop paying out your contracts on general futures prices, and instead more accurately structure payments depending on local pricing information – matching how your Yield and Revenue calculations are structured.

Our products power your underwriting models with better information so your business can make improved decisions. With advanced yield estimates, forward basis projections, and cash benchmarks, you can build a more effective insurance platform. Download our free whitepaper to learn more using Grain Yield Estimates to drive performance for your business. We’ll also be discussing our Yield Forecast Indexes in our new 2020 Grain Market Update Livestream Series, which provides insightful perspectives from industry leaders ahead of each WASDE Report. Register for the entire series here!

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