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\ I I I I I I I \ I I I \ I I II In examining the insurance data more closely, we find there area other points of interest which can be calculated to better approximate the actual amount of hail damage which should have occurred in the target area each year, with or without hail suppression, and what range of Farm Value may have been saved by hail suppression. We will define Farm Value (FV) as the remaining crop after all crop damage has occurred, including hail. No year passes without hail damage to crops, so, if there were no crop-hail damage during the season, the Farm Value (FV) would have been greater than shown. We call this hypothetical amount the Estimated True Farm Value (ETFV). Since Loss Cost (LC) is a representative sample of loss-to- insured liability, we can find how much crop-loss there should have been in the ETFV by multiplying ETFV by LC. This result will be the Estimated Crop Hail Loss (ECHL) and, mathematically, looks like this: (ETFV) x (LC) = (ECHL) Since Farm Value (FV) is the result of the hypothetical crop which we called ETFV, minus the ECHL, and by substitution, it can be rewritten as: ( FV ) = (ETFV) - [( ETFV) x ( LC ) ] or, by rearranging quantities, (ETFV) = (FV) [( 1 - (LC)] By putting in the numbers for each year's FV and LC into the above equation, we can find out what the Farm Value for the crop should have been for each year if there were no hail in the ETFV. This is shown on the next page, Figure 13. Since we now know what the Farm Value should have been each, year and what it really was, we deduce the difference is our Estimated Crop Hail Loss (ECHL) for each year as shown in Figure 14, page 46. All ECHL numbers are some multiples of the actual insured crop Loss for a given year, but not the same multiple from year to year. For instance, in 1985 the insured Crop Loss was slightly over $3 million; whereas, the Adjusted Crop Hail Loss amounted to $l5 million...a $12 million difference that some portion could have been added to WKWM Farm Value that year if less hail had occurred. The multiple was 5, or 4 times more crop was not insured than was insured. On a larger dollar scale the 1990 insured Crop Loss was near $8 million but there was a very large Estimated Crop Hail Loss of $25 million implied; the multiple was close to 3 with slightly more than twice as much uninsured as insured. In 1990 WKWM Farm Value ended higher than in any of the previous 4 years with Crop Loss, Liability and Loss Cost all were higher than any year of the prior five. 44