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How does our crop insurance analysis work?

Something as important as crop insurance deserves careful consideration.

We take a data driven approach to find the best insurance options for your unique needs.

Getting the right crop insurance is critical for your bottom line. At FBN, we recognize the importance in understanding and selecting the best option for your individual situation. Because of this, we approach insurance from a data driven perspective, and use a data based analysis to determine the best options for your farm.

This approach involves you inputing basic information about your operation, including: Counties you farm in and APH. We take this information and analyze it against historical premiums and indemnities at different coverage levels.

Where does the historical data come from?

We use historical market trends and yield data over the past 30 years to determine potential yield and pricing scenarios. This helps to simulate how individual insurance policies would perform using your current APH and cost of production, with market prices, under these historical scenarios.

Why 30 years?

We use 30 years because this gives us a better estimate of year-to-year variation, and provides a more representative sample of years for both market trends and yield over a longer time frame – than compared with a 10 year period.

The graphs below are examples of this, showing variability in yield and market prices for Decatur County, IA and CBOT prices over the past 30 years.

USDA Yield for Decatur County, IA.
CBOT Prices from Quandl.

How do we use the analysis?

Our analysis shows the potential performance of a crop insurance plan, highlighting what can happen in a worst case scenario. With this, we can directly compare plans to assess which is best for your individual needs. Here’s an example scenario of comparing two plans utilizing our data driven analysis:

You’re looking at the insurance plan you’ve used for the past few years–a YP policy at 75% coverage–compared to a YP plan at 85% coverage. When comparing Yield Protection at different coverage levels, it appears that the higher coverage offers less of a payout, with a slightly lower loss in profit in a bad year, with a higher premium.

But when comparing Revenue Protection at the same coverage level, the RP policy actually provides more coverage at a slightly higher premium price with the potential for more payout, and less of a loss in a bad year.

Data for Coroson County, South Dakota, with an APH of 130, and Product Cost of $458 / A.

Ultimately, in this scenario, it appears that the RP plan at 75% offers better coverage – and potentially protection in a bad year.

Are you confident in your coverage?

Insurance is an important piece where you can take a hard look to determine if it’s truly serving you and your unique needs. Be confident in your decision and your coverage.

Get an Analysis for Your Farm

Find the best coverage for your farm. See our data driven approach in action by comparing plans using our insurance analysis tool.

We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solution Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance. FBN Insurance is currently offered in the following states: AR, CA, CO, FL, IA, ID, IL, IN, KS, MI, MN, MO, MS, MT, ND, NE, OH, OK, OR, SD, TN, TX, WA, WI.
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