Agricultural Insurance Statistics International Experience Introduction of New

Agricultural Insurance Statistics – International Experience Introduction of New Programs and Informational Support Roman Shynkarenko, Project Manager www. agroinsurance. com February 6, 2007 www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

The purpose of collecting statistical information Comparison of quantitative program results within the years Identification of tendencies Assessment of products demand Understanding the problem aspects Modification and improvement of the insurance products More accurate assessment of the necessary government funds for subsidization of agricultural insurance programs www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Example of statistical data in Italy (new dynamically-developing market in Europe) Development of agricultural insurance market in Italy Number of policies Insured crops (value) Insured area 2000 2001 2002 2003 2004 251, 584 218, 067 221, 872 211, 542 11, 408 93, 412, 000 133, 436, 000 142, 829, 000 139, 938, 000 165, 018, 000 1, 037, 000 1, 005, 000 933, 000 950, 000 989, 000 Insurance sum € 000's 3, 500, 383 3, 232, 128 3, 216, 803 3, 333, 901 3, 604, 258 Premiums collected € 000's 258, 539 244, 728 269, 617 277, 039 269, 483 7. 39 7. 57 8. 38 8. 31 7. 48 213, 374 211, 267 173, 684 116, 633 169, 570 82. 5 86. 3 64. 4 42. 1 62. 9 Average premium rates Loss ratio % € 000's % www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Example of statistical data in Italy (new dynamically-developing market in Europe) Volumes, premiums and loss by crops in 2004 Share Premiums Average premium rate Loss share Loss ratio % % % Grain crops 27. 5 14 3. 82 7. 3 32. 9 Grapes 25. 1 20. 8 6. 2 29. 9 90. 4 Fruits 25. 3 44. 3 13. 1 46. 1 65. 4 Vegetables and potato 14. 8 12. 9 6. 55 12. 6 61. 5 Industrial crops 6. 5 7. 4 8. 48 3. 8 32. 4 Olives 0. 5 0. 3 4. 58 0. 2 42. 5 Seeds 0. 3 0. 2 4. 35 0 14. 1 Total 100 100 www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Example of statistical data in Italy (new dynamically-developing market in Europe) Risk statistics in 2004 Risk Hail Freeze Number of policies Area (ha) Value Premium sum € 000 198, 153 931, 000 3, 294, 198 249, 137 Average premium rate Loss ratio % 7. 56 € 000 153, 308 % 61. 5 894 166 3, 000 25, 852 5, 957 4, 826 425 18. 67 6 > <10 18 0 4. 2 11, 723 53, 000 269, 060 14, 214 5. 28 15, 867 111. 6 Multi-peril coverage (MPCI) 472 1, 000 9, 189 880 9. 58 376 42. 7 Greenhouses 549 127, 609 582 0. 46 36 6. 2 Hail, freeze, storm, other perils Hail and storm

Statistics in the USA (the biggest agricultural insurance market in the world) The data is collected on all products, crops and coverage levels. The table represents just a small example of statistical data. Source – RMA USA www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Statistics in the USA (the biggest agricultural insurance market in the world) The results of federal crop insurance program (subsidized) in the USA in 2005 -2006: Insured area (thousand of acres) Insurance sum (000 US dollars) Premiums collected (000 US dollars) 3, 949, 421 Subsidy (000 US dollars) 2, 343, 974 Premium paid by producers (%) Premium paid by the government (%) Pay-outs (000 US dollars) 2, 358, 501 Loss ratio (payouts in % to premiums) 2006 2005 242, 104 49, 925, 651 4, 577, 903 245, 866 44, 267, 155 2, 680, 939 41, 4% 58, 4% 2, 823, 017 40, 7% 59, 3% 62% 60% Preliminary results were informed at the beginning of January , 2007!!! www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Statistical data on mandatory crop insurance program in Kazakhstan in 2006 (publicized at the end of January 2007) Indicators 2005 2006 (+; -) Total area, 000 ha 14716, 6 14885, 0 168, 4 Insured area, 000 ha 9586, 2 9295, 3 -290, 9 Number of policies 20931 12850 -8081 Area insured, % 65, 1 62, 4 -2, 7 Premiums collected, million tenge 756 668, 9 -87, 1 Payouts, million tenge 914, 92 177, 75 Compensated payouts by the State Agency, million tenge 408, 75 46, 18 * Exchange rate 125, 98 tenge = 1 USD www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Statistical data on the federal crop insurance program (subsidized) in Russia in 2006 (basic information was presented at the round-table on January 24, 2007) In 2006 the producers insured 33% of the total cultivated area (17, 5 million ha) Number of farms insured increased from 2240 in 2001 to 10665 in 2006 The sum of premiums collected increased from 491 million RUR (2001) to 5, 8 billion in 2006. www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Insurance Statistics in Other Countries Canada – the data is collected on all crops, products and coverage level at each province. The results of the crop insurance products are made public after data processing (agricultural insurance and finance) www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Statistics in other countries Spain – statistics is present for years starting from 1980 when the subsidy program was introduced. The data is present on the crops, risks, products and regions similar to the USA. Germany, France, Austria and other countries – statistical data is less developed than in the countries with extensive crop insurance programs mostly because of lack of government involvement Graph – loss volumes in France during 19082006. Source – presentation at Madrid conference in November , 2006 www. agroinsurance. com – Agricultural Insurance and Risk Management Portal

Informational Support The quality of informational support and media coverage in Ukraine is worse than in some CIS countries. However CIS countries do not have sufficient public information (statistics and facts) like it is seen in the developed countries (USA, Spain, Canada) The media provides mostly image information and press-releases The web-site of insurance companies do not provide enough of information about the companies’ activities in agricultural insurance segment The web-sites updated irregularly It is necessary to provide more information for publicizing agricultural insurance programs. The insurers underestimate the role of mass media in the development of agricultural insurance www. agroinsurance. com – Agricultural Insurance and Risk Management Portal