In addition to residing in the “unfavorable business sector”, [[WFC]] is also having to deal with another problem. Crop insurance. Yes, it turns out that Wells execs read iBC too, and decided to take The Fly’s advice last year to “milk the farmer”.
This from Bloomberg yesterday:
“June 16 (Bloomberg) — Thunderstorms in Iowa and Illinois that have left farms underwater will lead to losses for crop insurers including Wells Fargo & Co., Ace Ltd. and Deere & Co., an industry group said.
Wells Fargo’s Rural Community Insurance Services unit has had 6,000 loss notices from farmers because of the flooding, triple the amount at this time a year ago, according to National Crop Insurance Services, a non-profit organization in Overland Park, Kansas. Most policyholders of Rain & Hail LLC, an Ace affiliate, will have a loss, the group said today in an e-mail, citing preliminary figures from the companies.
Crop insurers have benefited from record corn and soybean prices, which boosted the costs that farmers pay to protect their produce. They’ve also taken on more risk, in a year when floods in Iowa have led to the evacuation of more than 20,000 people, decimated corn crops and caused several deaths. The flooding is shaping up to be as bad as it was in 1993, when insurers in Iowa lost almost $5 for every $1 they made in premiums, the NCIS said.
“If this continues, it could be worse,” NCIS President Bob Parkerson said in an interview. “No tractor wheels have turned for a couple weeks. The next 10 days to two weeks is really going to determine if it is as bad as ’93 or not.”
After 1993, the worst year was 2002, the last time the industry lost money. Premiums paid to crop insurers jumped 43 percent last year to $6.6 billion, while the number of policies declined, according to the U.S. Department of Agriculture.
Wells Fargo, based in San Francisco, has reported losses affecting 2,500 farmers so far this year, the NCIS said. Moline, Illinois-based Deere, owner of John Deere Risk Protection, expects all policyholders in Southern Illinois to have a loss. As many as 40 percent of American Financial Group Inc.’s customers in that state may have a claim, the group said.”….
So which will it be? [[WFC]]@ $25.84, [[AFG]]@ $28.85 or [[DE]] @ $79.97?
Best of luck and thank you for playing.
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