There are currently 16 companies authorized to sell crop insurance to U.S. farmers. Because of the amount of risk present in writing policies for the U.S. agricultural sector, represented by an insured value of $102 billion in 2015, there are only a limited number of corporations, both domestic and international, that have sufficient liquid assets available, and are willing to risk them, to pay the required indemnities in a timely manner. Read more about the need for companies to have strong financial underpinnings here.
In fact, Federal regulations mandate that insurers have access to enough capital to offset at least twice the maximum possible underwriting loss (more than $9.7 billion in 2015).
Most lines of property and casualty insurance in the United States involve foreign insurance and reinsurance companies as global diversification is necessary to counterbalance risks across industries and countries around the world. This is especially the case for crop insurance due to the high potential for systemic, catastrophic loss. Put another way: Without foreign capital, the U.S. crop insurance business would be less diversified and more vulnerable to financial disruption.
Regardless of where a parent company or reinsurer is based, it is important to note that crop insurance businesses operate in the United States, invest in American assets, employ American workers and provide assistance to American farmers when those farmers and their neighboring communities need help the most.