Crop insurance expert witness, product development, strategic initiatives
Creative & Insightful Risk Management Solutions for Agriculture
Posted 02-18-12 The Federal Crop Insurance Act (Act) and the Common Crop Insurance Policy Basic Provisions (11-BR) (Basic Provisions), Section 12 Causes of Loss., states: “Insurance is provided only to protect against unavoidable, naturally occurring events.” On May 4, 2011, the Risk Management Agency issued Manager’s Bulletin MGR-11-004 regarding losses related to flooding in the Bird’s Point-New Madrid Floodway. It declared that such flood losses were "considered insurable causes of loss due to existing flooding of crop land, the overtopping of the frontline levee, and the impending failure of the levee system from flooding and saturation due to excess rainfall and thus an unavoidable, naturally occurring event." The dynamiting and breaching of the levees by the Corps of Engineers was not mentioned as a direct cause of the flooding behind the levees."Unavoidable" evidently means that if levees were potentially going to be breached somewhere on the river that breaches caused by large charges of dynamite are also "natural."
Similar logic would previent someone who killed your grandmother from being charged with murder because she would have eventually died anyway.
Lucky is Better than Smart, but you can't count on always being Lucky. If you could choose to be lucky or
smart, lucky is always the best choice. Being smart does not guarantee success. But, being smart does improve the odds that may seem to be against you.
People who are lucky can fall into the trap of thinking they are smart. One of my least rewarded jobs was telling senior managers of a crop insurance company that they had been lucky, not smart, in their previous successes. They wanted to stay the course with even
bigger bets. The luck soon ran its course and no one was left to reward the "I told you so." prediction.
But good odds aren't the only criteria. You have to be able to stay in the game long enough for the odds to work in your favor. That means you can only make bets you can survive the worst possible outcome (not the average). Russian roulette can be a very
profitable game, if you survive that one bad outcome. Had I been a better teacher of that principle, a great crop insurance company with wonderful people would not have crashed and burned.
I heard the other day that there are three alternative ways to be successful in business:
I have tried the first two with varying degrees of success and but I have been beaten by the last more
than once. Cheaters do not tolerate smart, because their ways are easily discovered by smart.
Cheaters cannot operate in the open.
Being First is exceedingly hard to do consistently and has inherent risks. To quote another “Pioneers get the
arrows, Settlers get the land.” But there is a certain amount of pride in
watching others copy your innovation and do it poorly.