Crop Insurance Racket is Pretty Lucrative

It also seems to draw the well-connected:

Former American International Group Inc. chief Maurice “Hank” Greenberg has a new business partner: the U.S. taxpayer.
Greenberg’s Starr Indemnity & Liability Co. is one of 18 companies approved to get federal cash for insuring farmers against loss of crops or income. Wells Fargo & Co. (WFC), the nation’s fourth-largest bank by assets, Zurich-based Ace Ltd. (ACE) and units of American Financial Group Inc. (AFG), Deere & Co. (DE) and Archer-Daniels-Midland Co. (ADM) all enjoy similar public backing.
The government subsidies show how a program created to safeguard the nation’s farmers has evolved into a system that in most years all but guarantees profits for insurers. In 2012, taxpayers spent $14 billion paying more than 60 percent of farmers’ insurance premiums, the companies’ operating costs and the lion’s share of claims triggered by a historic drought, according to the Congressional Research Service.

Also:

Second-ranked Ace’s credit worthiness was raised to “A” in 2010 by analysts at Standard & Poor’s. The insurer, headed by Greenberg’s son Evan, reported $2.7 billion in net income last year.
Other subsidy recipients include Dublin-based XL Group Plc. (XL) In 2006, Chief Executive Officer Mike McGavick, 55, was a Republican Senate candidate in Washington state who inveighed against the “crippling national debt” and was endorsed by the Club for Growth, one of the conservative opponents of the crop insurance program.
McGavick, through XL Group, declined a request for comment.
Likewise, Great American Insurance Group of Cincinnati, a unit of American Financial Group Inc., gets government help. Its corporate parent was founded in 1959 by the late billionaire Carl Lindner whose sons Carl III, 60, and Craig, 58, run the company as co-chief executives. Along with their mother Edyth, the three Lindners own almost $1 billion in American Financial shares, according to the company’s 2012 proxy statement.

Wells Fargo has 22% of the market, and is our policy writer.  The whole story is interesting.  It mentions that Paul Ryan wants to get rid of the government subsidy on farmers' premiums.  That would really cut down on program participation. The article doesn't even get into the deal farmers get on revenue coverage. And with the new farm bill, the program will likely be more lucrative for both farmers and insurers.