Drought Insurance

Maestro, Teresa; Garrido, Alberto; Bielza, María

doi:10.1002/9781119017073.ch8

Cited by 3 publications

(3 citation statements)

References 36 publications

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“…There are two main types of agricultural insurance, crop insurance (classic or traditional insurance) and index insurance. In crop insurance or indemnity-based insurance, the damage suffered by the insured due to natural causes [7] is measured in the field [8]. Indeed, the payment of the indemnity will only take place after an expert's assessment of the damage actually observed, thus there is no indemnity when there is no claim.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Index insurance could be classified into three categories: weather index insurance; satellite index insurance; area yield index insurance [10]. The weather index insurance pays indemnities based on variations of a weather index (rainfall, temperature, speed of the wind) [5,8] that is highly correlated with actual losses [14]. Satellite index insurance has the same fundamentals as climate index insurance except that the indices are implemented from satellite images such as evapotranspiration or the normalized difference vegetation index (NDVI).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Satellite index insurance has the same fundamentals as climate index insurance except that the indices are implemented from satellite images such as evapotranspiration or the normalized difference vegetation index (NDVI). In the case of area yield index insurance, the insurance indemnity to the farmer would be paid based on the area yield average, not on the individual farmer's losses [7], such that, if zonal yields fall below a reference level, all the insured farmers in the area receive compensation, regardless of who has actually suffered losses or who has not [8]. The advantage of index insurance lies in reducing the moral hazard risk and the adverse selection risk [7,15].…”

Section: Literature Reviewmentioning

confidence: 99%

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Mathematical Modeling of Agricultural Insurance Pricing in Morocco

Kouach,

El Attar,

El Hachloufi

2023

JERA

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The world risks having an imbalance in terms of food security; this is why Morocco started the Moroccan Green Plan strategy in 2008 which aims to develop the agricultural sector. Agricultural insurance is considered among the levers of agricultural development. For this reason, the professionals must attach great importance to the pricing of agricultural insurance which allows the increase in the demand for this type of insurance and consequently the increase in agricultural investment. But, the existing approaches of pricing in agriculture insurance are limited to statistical modelling of the pure premium which consists of the estimation of the distribution assumptions of the yield. In this regard, this article aims to use a mathematical model in the pricing of agricultural insurance, with a view to offering a fair pure premium. The approach of this research seeks to build a powerful mathematical model taking into account the wheat yield growth stages and the weather conditions. The studied model will be used to price yield index insurance for wheat crops. The results showed that the mathematical model provided an adequate approximation of futures losses and the pure premiums expected. Furthermore, that model allows indemnifying the farmers in advance without waiting until the harvest time. This paper helps the insurers to establish an agriculture insurance price when the historical data are not enough to build a frequency-cost model.

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Section: Literature Reviewmentioning

confidence: 99%