Farm Bureau Mutual Insurance Co. announced it has purchased Des Moines, Iowa-based Crop1 Insurance, the first company approved by the Federal Crop Insurance Corp. to offer the Premium Reduction Plan.
Crop1 Insurance will operate as a wholly owned subsidiary of Farm Bureau Mutual Insurance Co., one of three property-casualty insurance companies managed by FBL Financial Group Inc., an insurance and financial services holding company based in West Des Moines, Iowa.
USDA recently authorized Crop1 to again offer the Premium Reduction Plan in 2006. The approval came despite efforts by some crop insurance providers to persuade the government to terminate the program.
The Premium Reduction Plan or Premium Discount Plan was authorized by the Agricultural Risk Protection Act of 2000. Crop1 currently offers the plan in 21 states, including Arizona, California, Oklahoma and Texas.
Crop1 Insurance Chief Executive Officer Billy Rose says his company's Premium Discount Plan has historically provided savings of up to 10 percent on federally reinsured crop insurance programs with the exception of USDA's Catastrophic Insurance or CAT Program.
“This was a big win for farmers,” he said of the reauthorization. “Crop1 is the only company for the last three years that has been able to pass along savings averaging 8.5 percent to its customers.”
“This acquisition will strengthen both organizations,” said Bruce Trost, Farm Bureau Mutual executive vice president. “Crop1's position as an innovator and market leader brings additional expertise to Farm Bureau Mutual's crop insurance program, and Crop 1 will benefit from the strength of the Farm Bureau brand.
“Crop1's technology and proven savings will help us provide innovative and affordable crop insurance to meet the unique needs of crop producers throughout our marketing territory.”
Rose said the acquisition by Farm Bureau Mutual Insurance Co. will allow Crop1 to offer a savings to more crop producers across a broader geography.
“Crop1 Insurance has taken an innovative approach to delivering the best possible crop insurance to producers at a savings,” he said. “We use technology to pinpoint the best plan for their individual circumstances.
“Our discounts are icing on the cake. We've saved producers more than $4 million in premiums over the last four years and are poised to provide savings to even more producers in the future.”
Rose says Crop1's discount program has helped farmers large and small. About 60 percent of the company's customers farm less than 500 acres. Farmers in 15 states saved about $2.4 million with Crop1 policies in 2005.
The agriculture appropriations bill passed by the House last summer would have eliminated premium reduction plans, but the Senate voted not to include similar language in its bill.
Crop1 cannot guarantee growers will receive the same discounts as in previous years, but it hopes to continue to provide those savings through operating efficiencies and fitting individual policies to customers' needs, says Rose.
“Today's successful farmers know how to buy crop insurance,” he said. “We've been able to optimize or help them determine products would have done best for their operation and plug in their yields.
“We would not apply for the discount opportunity if we did not intend to work in good faith with the federal government to provide the discount for the farmers. I know Crop1 is the main company out there fighting for the farmers' right to a discount, and we're going to continue that fight.”