Catastrophic Nature of the Coverage

Since weather is the primary determinant of MPCI experience, exposures which are located in geographical proximity to one another will be highly correlated. This can be observed in the similar historical pattern of loss ratios for Iowa corn as compared to Iowa soybeans as shown in Chart 3. In years with severe weather, exposures separated by even greater distances can have similar experience. This can be observed in Chart 4, which compares the historical experience of Iowa, Minnesota, and Missouri.