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FCCS Risk Management Issues Stewardship Report

The Farm Credit Captive Insurance Company recently reported another successful year of delivering comprehensive risk management and insurance solutions at significant savings to its Farm Credit members.

As highlighted in the 2023 FCCS Risk Management Stewardship Report, through the Captive’s self-insurance coverages and the group purchasing power of the Farm Credit System for purchased commercial insurance, Farm Credit’s premiums were nearly half of what an independent company would pay for the same coverages – an annual savings of $37 million. The Captive also reports an overall surplus of $97 million at the end of 2022, the second highest amount in its history, despite experiencing low investment performance and higher than normal claims. The Captive had an unprofitable loss ratio of 102% for only the second time in its 35-year history; its 10-year loss ratio is 56%, compared to the commercial insurance industry’s 70%.

“Even as commercial insurance rates have skyrocketed year after year, the Captive continues to insulate Farm Credit and keep premium costs low, while also offering a comprehensive suite of coverages with very favorable terms,” says Brian Clanton, Senior Vice President of Risk Management and Insurance.

One way the Captive has delivered premium savings was the 2022 Farm Credit System Cyber Assessment, which was very well received by the industry. While the Cyber Assessment increased the Captive’s operating expenses from 9% to 14%, that’s still well below the commercial industry average 28% and the average performance of other Captives of 36%.

Based on the Captive’s financial performance in 2022, the Board of Directors approved a $7 million dividend to be paid to member organizations in April. This brings the total distributions to $143 million, or 38%, of the total premiums paid since the Captive’s inception in 1988.

The 2023 Stewardship Report includes an overview of the 2023 insurance renewal, and offers detailed descriptions of insurance coverages, limits, premiums, rates and losses. Click here to learn more.

For more information on insurance coverages and risk management services, including presentations on risk management strategies and coverages, contact Lisa Parrinello, Vice President, Risk Management and Insurance Services, at 303-721-3214 or via email.

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