Wells Fargo & Co.'s Rural Community Insurance Co. became the largest writer of crop insurance in the U.S. in 2013, according to a study by SNL, hiking its market share 5% to pass ACE Ltd. as the largest writer of crop insurance in terms of direct premiums written.
The entire category grew only to $11.659 billion in premiums in 2013 from $11.396 billion in 2012, but the category is expected to grow because in the farm bill Congress appears to be switching its efforts in subsidizing the farm industry from direct supports to insurance, according to SNL data.
Wells Fargo's market share rose because Allianz exited the direct premium business and involved itself in the crop business only through reinsurance through its Firemen's Fund unit. The SNLreport said Allianz SE's Fireman's Fund Insurance Co. fell out of SNL's crop insurance market share rankings in 2013 after ranking fifth in 2012.
The company reported negative $211,184 of direct premiums written for crop insurance for 2013, compared to $859.5 million in 2012. In its 2013 annual statement, Fireman's Fund attributed the reduction in its crop business to a change in a reinsurance agreement with Rural Community, SNL said. The agreement lowered the quota share with Rural Community to 20% from 50%, and Fireman's Fund ceased writing direct premium in the crop business.
ACE's share of the market remained relatively flat, declining to 18.4% of the market from 18.74% in 2012, because its sales only rose $9 million, while Wells Fargo's direct premiums written grew $620 million. That raised its market share to 20.03%, compared to 15.05% during the prior year, SNL said.
Picking up significant market share in 2013 was XL Group Plc, which reported direct premiums written of $51.9 million in 2013, compared to $4.9 million the year before. In February 2014, the company acquired Global Ag Insurance Services, with which it had previously launched a platform in the western United States, SNL said.
The SNL report said there are 26 players in the crop insurance market. One of those is Starr International, the former AIG unit controlled by Maurice "Hank" Greenberg, which entered the market last year. Starr was listed as the industry's 20th-ranked player, with $45,702 million in direct premiums written, or 0.39% of the market.
Third-ranked player in the U.S. crop insurance industry, according to the report, was QBE, with 13% of the market, followed by American Financial Group, Endurance Specialty Holdings and CUNA Mutual Insurance Co.
Picking up significant market share in 2013 was XL Group Plc, which reported direct premiums written of $51.9 million in 2013, compared to $4.9 million the year before. In February 2014, the company acquired Global Ag Insurance Services, with which it had previously launched a platform in the western United States. It ranked 18th, with 0.45% of the market.
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