Fetal/Foal Loss Syndrome Having Impact on Equine Insurance Business

The effects of the current crisis resulting from mares aborting or having late-term stillborn foals are being felt on the equine insurance business. According to insurance professionals, underwriters are not accepting any policies written for barrenness or prospective foal insurance in Central Kentucky.

"The whole market for that type of insurance is closed down," said Bill Carl, who operates Old Colony Insurance in Lexington. "I have a ton of orders on my desk. I have farms I have insured for 40 years and I have to tell them we're in a holding pattern. There is some possibility that once we get cleared through this thing, they will start writing prospective foal insurance again. It is in sort of a crisis situation now and underwriters are sitting back to see what happens."

Carl said underwriters would reconsider their position on prospective foal insurance if researchers at the University of Kentucky's Gluck Equine Research Center were able to pinpoint possible causes of the problem. "I think if we could ever get it under control, with no more than the normal number of mares being barren, it will open up. Underwriters are sitting there, asking 'What is it?' If we could ever identify if it's the wooly worms, or something toxic, or something else, then underwriters will feel more comfortable."

Breeders who have established insurance accounts should have no problem obtaining prospective foal insurance once the current crisis has eased, Carl said. "They will not desert old clients," he said. "Underwriters are keeping an open mind and are not deserting them right now."

Ron Kirk of Lexington's Kirk Horse Insurance said the impact of the crisis on his business is limited because not many of his clients have that type insurance in force at the present time. "Our position is that we are not writing any additional coverage for that type of insurance until more is known about the extent of the problem," Kirk said. "It happens to be a relatively low period for us in terms of the amount of exposure we have."

Kirk said a large percentage of his company's prospective foal insurance coverage is placed following the November breeding stock sales. Buyers of broodmares that are in foal on stallion nomination contracts guaranteeing a live foal will obtain the insurance for the remainder of time until the mare foals. Kirk explained that most live-foal breeding contracts do not extend the guarantee to the new buyer, who is likely to purchase insurance to cover their risks.

While prospective foal insurance is currently on hold, Kirk said the impact of the crisis on the equine insurance business is limited when compared with its potential effect on the rest of the industry.

"I don't see this being an insurance issue; insurance is a much smaller amount," Kirk said. "I see it primarily being a loss of income for stallion owner and for breeders. I am more worried about the broader implications of farms being unable to pay bills as a result of their lost income."

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