Calculation of crop insurance premium based on dependence among yield price, crop yield, and standard rainfall index using vine copula

Hidayat, Agus Sofian Eka; Gunardi, .

doi:10.1063/1.5139122

Cited by 1 publication

(2 citation statements)

References 13 publications

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“…it has premium insurance complication of the procedure to claim the loss must follow several conditions. According to Hidayat & Gunardi (2019) there are some tendency of the farmers is not interested to join the AUTP because the complexity of the claim process as well as the premium is still not reasonable. Thus, it's important to adjust new types of insurance, which can give another option to farmer or group of farmers for insuring their lands.…”

Section: A Introductionmentioning

confidence: 99%

“…Insurance based on rainfall is becoming new trend in development country such as in China, Australia, and Iran (Adeyinka et al, 2016). Rainfall can be used for calculating the insurance premium because its dependency with the yield (Hidayat & Gunardi, 2019). There are several techniques that can be used to determine the premium of insurance premium of crop insurance based of cumulative rainfall such as copula (Bokusheva, 2018), weather index (Adeyinka et al, 2016) and American put option using Black Scholes Model (Putri et al, 2017).…”

Section: A Introductionmentioning

confidence: 99%

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Modelling Crop Insurance Based on Weather Index Using The Homotopy Analysis for American Put Option

Hidayat

Afa²,

Kurniawan

2021

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The crop insurance in Indonesia (AUTP) is much focused on the area impacted by flood, drought, and pest attack. The complication of the procedure to claim the loss must follow several conditions. The different approaches in the insurance sector, using weather index can be taken into consideration to produce a variety of insurance products. This insurance product used the American put option with the primary asset is the rainfall and the cumulative rainfall to exercise the claim, considering the optimal execution limit. The homotopic analysis is used to determine the valuation of the American put option, which also becomes the insurance premium. The case study is focused on areas experiencing a drought so that insurance claims can be exercise when the rainfall index value is below a predetermined limit. Considering the normality of the rainfall data, the calculation of insurance premium was done for the first growing season. The insurance premium is varies based on the optimal execution limit, while the calculation of profit is based on the optimum limit exercise and the minimum rainfall for the growing season, and its different depended on insurance claim acceptance limits.

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Section: A Introductionmentioning

confidence: 99%