Farming is a major factor in rising insurance premiums.

FARGO, ND – Elevators and other companies that buy commercial real estate insurance are “feeling a lot of pain” because of sudden, unexpected increases in insurance costs, insurance executives say.

Scott Aukes, president of the ag division for Assured Partners in West Des Moines, Iowa, a national insurance company, spoke at the North Dakota Grain Dealers convention in Fargo on January 16, 2023. He said from companies that are seeing major changes in terms and conditions – much higher insurance premiums and deductibles, as well as provisions for general policies that include home and property work Leaders of the co-op and other insurance managers at the meeting reiterated his concerns.

Scott Aukes, president for the AG group for Assured Partners in West Des Moines, Iowa, talks to business owners concerned about insurance premium increases. He spoke at the North Dakota Grain Dealers convention in Fargo on January 16, 2023.

Mikkel Pates / Agweek

“We’ve seen insurance premiums go up 20% to 100%,” said Aukes, “At the same time their deductibles go up from 50% to 200%.

High insurance costs can seriously affect the “financial performance” of some companies, and “it’s a very bad thing,” Aukes said, dismayed.

“I think we’re in for this for the next two years,” he said. According to him, the co-ops are big enough to take a lot of ‘recording,’ (deductible) will be at the top of the list for all the insurance companies that are still in the game.

Assured Partners works with 1,200 agricultural companies in the Midwest, with over $200 million in investments. They sell to customers in Iowa, Minnesota, and North Dakota, and some in South Dakota. They sell insurance from the first insurance companies, and always on three operators for a particular ship.

There are only a handful of large insurance companies dealing with the agricultural business to begin with, and that’s shrinking, Aukes said. In contrast, about 50 large companies may face electricity contracts, he said.

“If you’re a freelancer with a lot of real estate in rural America, there are only five people willing to book your business,” Aukes said, pointing to a large company. was recently removed from covering grain elevators.

Among the reasons for the general distance from things like fire protection, etc. It has become “impossible” for reinsurance companies to plan the rates that have allowed them to continue making money, in the face of major climate “patterns” and “nuclear judgments” issued by the court five years ago, he said. .

‘Reinsured’ losses

Insurance companies sell some of their risk to “re-insurers.” Those reinsurers – originally based in London – have been out of business in recent years.

“Especially, (re-insurers) have been really hurt in recent years, so the re-insurance companies have changed their terms, their terms, especially their prices in retail insurance companies.”

According to Aukes, the increase in weather patterns, including derechos or snow storms, can affect the traditional insurers. Insurance companies are limiting their coverage or pulling out of property coverage for things like hog production areas and dairy operations.

In addition to accepting more “deductibles” or deductibles, Aukes said that some ag co-ops are considering personal insurance, to cover the loss of a group rather than traditional insurance.

He said Minnesotans have created the Parthenon Agency LLC, a “risk management agency,” to work together to reduce risk.

He also said that the elevator should connect with business people who have access to many insurance companies and should be willing to tell about the real safety, certification and improvement programs, so that enabling them to qualify for the best races available.

“And let’s be honest: If you had a grain bin in the 1980s would you have run the ‘replacement price’? Please don’t expect to get replacement costs on these going forward, unless you are doing a full rebuild and the replacement costs are ‘worth it’. ” said Aukes.

An elevator operator asked the crowd how the insurance premiums for wood-framed buildings, some of which continue to be used by although most companies stopped construction in the 1960s.

“Do you still have it?” Aukes said, half-heartedly, and then it got to the point: You can get the cover on the grain in the house, he said. But the house itself? “It’s going to be a tough one.”

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