What is the role of the private-sector crop insurance companies?

The private-sector crop insurance companies employ agents and loss adjusters who sell policies to farmers and determine the extent of losses, collect premiums and pay claims. The crop insurance companies also share in the underwriting gains and losses of the program.  In good years, the government collects a portion of the underwriting gains and in bad years the private sector absorbs a share of the losses, thus reducing taxpayer exposure.

The companies employ more than 20,000 licensed agents, certified loss adjusters and company staff. (For more information on the role agents play, click here.) Furthermore, companies invest heavily in technology, infrastructure efficiency, training programs and service improvements for farmers and ranchers.

Beyond fulfilling their delivery and service obligations, insurers have contributed to improving the program by providing input and feedback on the implementation of ever-changing rules and policies.

Farmers benefit from private-sector efficiency, which speeds payments when needed most, and taxpayers benefit from reduced overhead costs and strict procedures to combat waste, fraud and abuse.

* Updated April 2020

Watch a video on private-sector efficiency below. Also, watch the below video that discusses why affordability, availability, and viability of Federal crop insurance are so crucial.