Agricultural businesses provide 13% of total commercial insurance premiums written in the United States, accounting for $17 billion in premiums written. The loss ratio is 69.6%.
"Agriculture represents one of the most important markets in the United States, employing some
12.76 million people," notes Lindsay Smith, president of IMR (Insurance Market Research) Corp. "There continue to be a large number of small and medium-sized agricultural enterprises, making them important targets for independent agents. Of the $17 billion in premium, nearly $10 billion is generated by some 417,000 small and medium-sized accounts. There are approximately 40 different subcategories in the agricultural arena and significant differences between regions."
There are 314,645 small agricultural businesses (employing fewer than 20 people) in the United States, which account for $3.79 billion in premium for an average premium of $12,035 per account. There are 102,639 medium-sized accounts (20-99 employees) providing
$6.17 billion in premium for an average of $60,160 per account. The 30,231 large businesses (100-499 employees) account for $7 billion in premium and an average of $231,430 per account. The 86 jumbo accounts (over 500 employees) provide $47.1 million in premium for an average of $547,945 per account.
Agriculture provides $4.24 billion in premium in the Rough Notes Southeast region. The loss ratio is 70.8%. There are 122,472 agricultural businesses in the Southeast, employing 3,605,673 people. The 83,334 small agricultural businesses (those employing fewer than 20 people) account for $827.7 million in premium for an average of $9,930 per account. The 30,928 medium-sized accounts (20-99 employees) provide $1.57 billion in premium for an average of $50,865 per account. The 8,180 large businesses (100-499) account for $1.82 million in premium for an average of $222,720 per account. The 30 jumbo accounts (over 500 employees) provide $15.2 million in premium for an average of $507,005 per account. Beef cattle, except feedlots, represent the largest subgroup in the Southeast, with $848.1 million in premium and a loss ratio of 71.5%. Hogs are the next largest subcategory, with $640.6 million in premium and a loss ratio of 74.4%, followed by broiler, fryer and roaster chickens ($355.6 million; 71.7%); citrus fruits ($318.6 million; 63.1%); vegetables and melons ($308.8 million; 71.6%); and ornamental nursery products ($290.6 million; 69.0%).
To obtain information on this and other niche markets, call IMR at (888) 237-7066.
©COPYRIGHT: The Rough Notes Magazine, 2000