The Farm Credit System Captive Insurance Company has reported a net income of $10.3 million in 2016, an increase of 7.8 percent compared to the previous year.
The captive’s 2016 results highlighted a “healthy investment income” and expanded coverages to protect Farm Credit organisations in a time of change in the financial services and agriculture sectors.
One of the new coverages protects against fraud claims stemming from email scams, while another is medical stop-loss, which covers the self-insurance medical trusts of the system against high-dollar claims.
However, the results did show that premiums earned by the captive, and paid by the member organisations, decreased by 3.26 percent compared to the prior year, totalling $16.2 million.
The company explained that this was due to significant rate decreases in the casualty lines and declines in scheduled values in the Lenders’ Single Interest programme, offset by the growth of the system itself, which carries increased insurance exposure.
Larry Lawson, president of the captive and executive vice president of risk management and insurance services at FCC Services, said the 2016 results show that “financially, the captive had another good year and remains financially solid”.
Lawson added: “It continues to return value to the Farm Credit System by providing superior insurance coverage at reduced costs.”
He explained that by buying insurance through the captive and as a group, “the system saved in excess of $20 million in 2016”.
In 2016, the captive handled 1,029 claims, of which 845 were opened during the year. The report revealed that the risk management and insurance services team closed 837 of those claims, with 192 still open at the end of the year.
According to Lawson, total claims payment totalled nearly $8 million.
In addition, FCC Services, along with the captive’s board of directors, has appointed new team members to expand the captive’s expertise and strength.
Lawson said: “We’ve taken steps in the last two years to strengthen our staff and provide solid continuity for management in the years to come. We’ve positioned the team well to address the emerging and continuing insurance and risk management needs of the captive and the Farm Credit System.”
