Palomar Holdings Acquires Advanced AgProtection to Bolster Crop Insurance Business
Palomar Holdings, Inc. has entered into a definitive agreement to acquire Advanced AgProtection (AAP), a Texas-based managing general agent (MGA) focused on crop insurance. The deal, which is expected to close in the second quarter of 2025, follows Palomar’s initial strategic investment in AAP in 2023, marking the start of a formal partnership between the two companies.
AAP specializes in crop insurance, and its team will be integrated into Palomar as part of the acquisition. AAP’s team brings significant experience and established relationships within the crop insurance sector. As an MGA, AAP provides underwriting and distribution services for crop insurance products.
Jon Christianson, president of Palomar, noted that the acquisition of AAP will further support the expansion of Palomar’s crop insurance business.
Crop Insurance Market Trends and Growth
Palomar’s expansion into the crop insurance segment aligns with positive growth trends and projections within the US market.
In 2024, farmers and ranchers invested over $6 billion to secure roughly 2.4 million crop insurance policies, providing $159 billion in protection against various risks. This coverage extended across more than 543 million acres, representing nine out of ten eligible acres nationwide.
While the US Department of Agriculture is still finalizing total indemnity payments for 2024, the numbers have already reached $12.8 billion. Notably, over $800 million in indemnities were delivered within two weeks following hurricanes Milton and Helene, demonstrating the effectiveness of the program.
The global agricultural insurance market is also projected to grow substantially, increasing from $50.05 billion in 2024 to $71.18 billion by 2032.
Despite these positive trends, it’s important to note potential challenges. The Congressional Budget Office projects that premium subsidies for crop insurance will continue to be a significant expense, with subsidies costing nearly $12 billion in 2023. Furthermore, underwriting results for US multiperil crop insurance (MPCI) writers may face pressure if commodity prices decline or yields are negatively impacted.
