AIR Worldwide’s new hail risk modeling system has drawn mixed reviews from crop insurers.
The system is the industry’s first probabilistic computer model designed to better assess hail risk. Data from the new model should be able to provide a more complete risk picture, commented Palliser Insurance CEO, Ken Doleman.
“It gives us a better forward look as opposed to just simply a rear-mirror look,” Doleman told The Western Producer.
Doleman said that the AIR computer model assesses 10,000 years of weather and climate history and uses calculations to determine the probability and timing of storms. The resulting information is then overlaid with Palliser’s own database, which Doleman has described as one of the most extensive databases on hail loss insurance in Western Canada.
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However, not all insurers are quite so enthusiastic about the modelling risk system.
Rodney Schoettler, CEO of Saskatchewan Municipal Hail Insurance (SMHI), said that while he is not opposed to the new risk modelling system, he doubts if it can actually help the industry. According to Schoettler, although the AIR probabilistic model can project possible future risks, the data has little value in his current business model.
“We don’t really honestly care what the future will bring,” Schoettler explained. “If a model says two years from now it’s going to hail more so your risk is going to go up, we’re not going to respond today anyway. We’re still going to write it based on our experience.”
Schoettler said that SMHI determines its rates based on its 100-year database for each township. He also noted that the company’s hail coverage is tied to property ownership, with 80% of farmer-clients choosing to renew their coverage in succeeding years via the annual crop reports they accomplish.
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