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Fort Collins, CO | D6Joe,
All insurance, not just crop insurance, is (or, at least, is meant to be) priced way above the risk that the insurance company thinks they're assuming. They've got salespeople, adjusters, fancy offices, etc. to pay for, and they can't afford their overhead if they're only breaking-even on premiums versus claims. I'm not judging it or defending it, just stating a fact.
That said, crop insurance, at least revenue protection crop insurance, has two fundamental components. The first is a yield guarantee. The second is a put option with a slippery strike (which, if you want to go down the rabbit hole, is a bet on the correlation between price and yield at a national level). Are you marketing around these two features in a way that attempts to maximize the value of both? Because if either, or both of the components, gives you the confidence to market more effectively, the overall benefit to you might be more.
In the interest of full disclosure, I'm not a crop insurance agent, and I would never suggest that anyone should buy (or not buy) crop insurance without talking to a certified agent.
Regards,
James | |
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Crop insurance & PP
