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Near record year for hail insurance claims experienced

Intense hail storms contribute to payments of more than $322 million this year
sk storm aug 2021 hail photo large
Hail collected during August 2021 storm in Moose Jaw

The Prairies experienced fewer hail storms this summer but storms had greater intensity than usual, according to a hail insurance report by Canadian Crop Hail Association.

Hail insurance writers in the association made near record payments of more than $322 million on hail claims this year.

Claims paid out amounted to104 per cent of premiums collected, requiring issuers to dig into reserves.

The association insured over $8 billion in crop values.

“Storm frequency was below average in 2021,’’ said the report. 

“The number of days producing active weather fell below the five-year average. Storm severity, or the cost per claim quickly built like the clouds that cause the hail. 

“What looked to be an average storm season endured record high claim payments. All three Prairie provinces had average cost per claims higher than the five-year average.”

Saskatchewan was hit the hardest with losses equalling 134 per cent of premium collections. That compares with 65 per cent losses to premiums in 2020.

The hail season started early on June 5 with a west central Saskatchewan storm. The industry reported four major storm dates in July with more than 2,600 recorded claims costing more than $98 million.

More average storm activity happened in August with four major storm dates. Storms on Aug. 31 and Sept. 1 took the industry to its final loss numbers with almost 1,800 claims and a cost of more than $43 million for the second worst of the season.

The single largest loss day was July 22 with more than 1,300 claims at a cost of more than $53 million. July accounted for more than 43 per cent of claims paid for the year.

The number of claims-to-policies was 12 per cent higher than the five-year average.

“It was really the severity of the damage that devastated the industry.”

Average cost per claim was more than double the five-year average.

Total sums insured saw a slight increase year-over-year, likely due to increased crop prices and early crop outlook prior to the drought and heat like conditions. 

The industry average rates continued to decline for 2021 so current average rates are now at or near their lowest historic levels.

Ron Walter can be reached at ronjoy@sasktel.net