Alberta insurer pays out Cdn$150 million for 2007 hailstorm claims

Agriculture Financial Services Corp. an Alberta crown corporation (with a private-sector board of directors) that provides farmers and agribusinesses with crop insurance and farm income disaster assistance paid out a record of more than 7,200 hail-related claims this year.The Edmonton Journal has reported that a record 89 hailstorms flattened farmers’ fields in the summer, resulting in a Cdn$150-million loss for AFCS.”It was a bad year for farmers and a bad year for us,” the Journal quotes Gilbert Goudreau, AFCS’ manager of adjusting services as saying. “Usually, certain areas will get hit by hail but this year, whether it was Peace River or Lethbridge, there was heavy hail across the province.”Some farmers got hit five times, the Journal noted. The paper also reported that many farmers have both a hail endorsement on their crop insurance, as well as straight hail insurance.”The total number of farmers filing claims was around 5,500, more than one-third of the insured farmers,” Goudreau told the Journal.It is reported that the insurance industry spends Cdn$2.5 million on seeding clouds to reduce the size of hailstones. Seeding works as follows, according to the Journal: hail forms when moisture from clouds creates ice crystals around small particles of dust. Since there is only certain amount of moisture in a cloud, when additional particles are added to the mix silver iodide, for example more hailstones are formed, but they are much smaller and less damaging.”We’re certainly convinced that this helps bring premiums down,” Michael Debolt, government affairs manager of the Alberta branch of the Insurance Bureau of Canada, told the Journal. “It is a worthy investment to do that.”