22 October 2022, US: The USDA Risk Management Agency (RMA) has an insurance program for ranchers and beekeepers insuring against the lack of precipitation in 2-month non-overlapping intervals throughout the year.
The Insurance program is called Rainfall Index and is better known as either Pasture, Rangeland and Forage (PRF) or Apiculture (API).
To learn more about the PRF program, read What Producers Need To Know About Rainfall Index And Pasture, Rangeland And Forage Insurance.
Over the years, agencies, insurance companies, and other groups have developed tools to aid the producer in determining a coverage level, productivity factor, which index intervals, and how much coverage to assign to an index interval throughout the year.
These tools are used by agents to help provide some guidance for different coverage options. Many of them work by taking a set period of time (e.g. most recent 10 or 20 years or all years of the data) and averaging the data from those time periods to create a coverage option.
In addition, most of these tools only allow the agent to run a single coverage scenario at a time. To compare one coverage scenario to another the agent has to run multiple coverage scenarios using different values to compare to each of the other coverage scenarios.
FBN® Insurance has developed proprietary software to support a PRF and API insurance coverage decision. This proprietary software allows an FBN agent to optimize the analysis in assisting a producer in selection of coverage that meets their needs.
The pairing of an individual’s risk tolerance with the amount of premium they are willing to pay for the coverage is a key element of the process. FBN’s proprietary software allows our agents to reduce the amount of time invested in running multiple coverage combinations simultaneously.
By running multiple coverage combinations simultaneously, the tool gives you multiple options to review and choose from a single analysis. You are given the ultimate authority to establish a baseline to modify the coverage parameters based on your experience and risk management needs.
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