August 21, 2012 / 2:22 PM / 5 years ago

S&P report on U.S. crop insurers and drought effects

Aug 21 - Crop insurers will see some of the worst underwriting results on
their books of business this year since the drought of 1988, according to a
report published today on RatingsDirect by Standard & Poor's Ratings Services
titled, "Drought Will Hurt U.S. Crop Insurers, But Won't Dry Them Up
Completely."

Farmers in the most affected states are expecting one of their worst harvests 
since the drought in 1988. As a result, crop insurance books of business will 
see some of the worst underwriting results since 1988. Primary insurance 
companies will share crop losses with the federal government and private 
reinsurance companies, making the underwriting losses easier to take.

"Underwriting losses will be a drag on earnings, but by themselves, will 
likely not affect the capital of most insurers that we rate. Consequently, we 
do not expect to take any rating actions solely because of crop insurance 
losses at this time," said Standard & Poor's credit analyst Jason Porter.


The report is available to subscribers of RatingsDirect on the Global Credit 
Portal at www.globalcreditportal.com. If you are not a RatingsDirect 
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 
or sending an e-mail to research_request@standardandpoors.com. Ratings 
information can also be found on Standard & Poor's public Web site by using 
the Ratings search box located in the left column at www.standardandpoors.com.

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