Best’s Market Segment Report: U.S. Crop Insurance Writers Benefit as Weather Impacts Ease

OLDWICK, N.J.--(BUSINESS WIRE)--After experiencing a decline in 2024, crop insurance premium volume is expected to hold steady in 2025, according to a new report from AM Best.

Underwriting results for the segment have improved significantly amid more favorable growing conditions, prompting AM Best to maintain its cautiously optimistic view. “Conditions have been fairly normal so far this year,” said Connor Brach, associate director, AM Best. “Although there are minor to moderate concerns with regard to drought and excessive moisture conditions in certain regions.”

Total premiums for U.S. crop declined by 9.4% to $18.9 billion in 2024, down from its peak level of $21.5 billion in 2022. However, overall premium levels remain elevated compared to pre-2022 figures, supported by higher commodity prices. The ongoing decline has been largely driven by the multi-peril crop insurance line of business, which fell 9.8% to $17.4 billion in 2024. Private crop insurance premiums decreased by 3.7% to $1.48 billion.

According to the report, national yields for corn and soybeans are anticipated to be roughly in line with expected trend levels. With yields forecasted to hold up, the main risk for crop insurers at this point is commodity price risk, due to the majority of exposure being attributable to revenue-based coverages. “There is the potential for adverse weather conditions, which remains until after harvesting season concludes,” Brach said. “Hail activity continues to be troublesome for private crop insurers, although initiatives have been put in place to improve results on these products.”

MPCI premium rates are determined by the U.S. Department of Agriculture’s Risk Management Agency through actuarial and statistical analysis, as well as professional judgment. Agricultural commodity prices and their expected volatility are among the most important factors taken into consideration. Understanding price movements is key since revenue protection currently accounts for over two-thirds of U.S. MPCI premiums. Most revenue protection safeguards against both yield and price risk and sets the producer’s total revenue guarantee, using the greater of two prices: the projected price or the harvest price.

Among the report’s other highlights:

• Indemnities owing to droughts declined more than 50% year-over-year, while losses driven by excessive moisture conditions worsened. In commodity year 2024, the crop insurance program generated a loss ratio of 93.1. Results in Texas continued to improve, albeit they were still unfavorable with a loss ratio of 132.6. Drought and heat losses in the Lone Star state continued to be problematic, especially on the western side of the state, while excessive moisture conditions plagued the east.
• Heat losses totaled $1.36 billion, down roughly $150 million year-over-year, with most losses concentrated in California. Significant growth of area plans has corresponded to higher indemnities of $2.9 billion, increasing from roughly 5% of total indemnities in 2015 to nearly 20% in 2024.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=356110 .

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.