We are one month or so away from our first annual settlement with RMA on crop year 2013 business. The key report from RMA, which discloses whether an Approved Insurance Provider (AIP) can pay profit shares to agents for previous crop year, will be available in mid-October.
There was some early uncertainty about whether ProAg would be eligible to pay a 2013 profit share, due to open claims of unknown severity on our 2013 California citrus business. This business was hit by a significant freeze event in December of 2013, towards the end of the insurance period. We are pleased to report that, despite the California losses, our UW gain as of this writing is still above 4.0%. We are now 99% certain that it will be sufficient to pay all profit share amounts otherwise earned by our agents on their 2013 business placed with ProAg. This is great news for many of our agents, and we look forward to making these payments during the latter part of October, or shortly after RMA funds our 2013 underwriting gain.
2014 appears to be another year with an extended revenue loss claims season on the horizon. Higher than average yields on cotton, corn, and soybeans have reduced expected harvest prices. This is similar to the 2013 crop year, where falling corn prices caused uneven UW results. For many of our policyholders, the high yields will cancel out the lower prices. The challenge for AIPs will be in handling the heavy work load associated with evaluating sold production and measuring stored grain on virtually all revenue policies. Fortunately for our policyholders and agents, ProAg is built to handle this task and is prepared to once again provide superior claims service on harvested production across the USA.
Any questions or comments, please let me know… as always, thank you for your support of ProAg !