scholarly journals Farmers’ Demand for Informal Risk Management Strategy and Weather Index Insurance: Evidence from China

2021 ◽  
Author(s):  
Yingmei Tang ◽  
Huifang Cai ◽  
Rongmao Liu
Keyword(s):  
Risk Management ◽  
Field Experiments ◽  
Management Strategies ◽  
Insurance Companies ◽  
Index Insurance ◽  
Insurance Demand ◽  
Weather Index ◽  
Weather Index Insurance ◽  
Risk Management Strategies ◽  
The Government

AbstractIn the absence of formal risk management strategies, agricultural production in China is highly vulnerable to climate change. In this study, field experiments were conducted with 344 households in Heilongjiang (Northeast China) and Jiangsu (East China) Provinces. Probit and logistic models and independent sample T-test were used to explore farmers’ demand for weather index insurance, in contrast to informal risk management strategies, and the main factors that affect demand. The results show that the farmers prefer weather index insurance to informal risk management strategies, and farmers’ characteristics have significant impacts on their adoption of risk management strategies. The variables non-agricultural labor ratio, farmers’ risk perception, education, and agricultural insurance purchase experience significantly affect farmers’ weather index insurance demand. The regression results show that the farmers’ weather index insurance demand and the influencing factors in the two provinces are different. Farmers in Heilongjiang Province have a higher participation rate than those in Jiangsu Province. The government should conduct more weather index insurance pilot programs to help farmers understand the mechanism, and insurance companies should provide more types of weather index insurance to meet farmers’ diversified needs.

scholarly journals Risk transfer beyond reinsurance: the added value of CAT bonds

2021 ◽  
Author(s):  
Tobias Götze ◽  
Marc Gürtler
Keyword(s):  
Risk Management ◽  
Default Risk ◽  
Management Strategies ◽  
Added Value ◽  
Insurance Companies ◽  
Data Set ◽  
Basis Risk ◽  
Cat Bonds ◽  
Risk Characteristics ◽  
Risk Management Strategies

AbstractReinsurance and CAT bonds are two alternative risk management instruments used by insurance companies. Insurers should be indifferent between the two instruments in a perfect capital market. However, the theoretical literature suggests that insured risk characteristics and market imperfections may influence the effectiveness and efficiency of reinsurance relative to CAT bonds. CAT bonds may add value to insurers’ risk management strategies and may therefore substitute for reinsurance. Our study is the first to empirically analyse if and under what circumstances CAT bonds can substitute for traditional reinsurance. Our analysis of a comprehensive data set comprising U.S. P&C insurers’ financial statements and CAT bond use shows that insurance companies’ choice of risk management instruments is not arbitrary. We find that the added value of CAT bonds mainly stems from non-indemnity bonds and reveal that (non-indemnity) CAT bonds are valuable under high reinsurer default risk, low basis risk and in high-risk layers.

Bounded rationality and the adoption of weather index insurance

2018 ◽  
Vol 78 (1) ◽  
pp. 116-134 ◽  
Author(s):  
Oliver Mußhoff ◽  
Norbert Hirschauer ◽  
Sven Grüner ◽  
Stefan Pielsticker
Keyword(s):  
Risk Management ◽  
Bounded Rationality ◽  
Controlled Trial ◽  
Observational Research ◽  
Simulation Game ◽  
Index Insurance ◽  
Weather Index ◽  
Content Type ◽  
Weather Index Insurance ◽  
Willingness To Adopt

Purpose The purpose of this paper is to check which role-bounded rationality might play as an explanation for farmers’ missing willingness to adopt weather index insurance (WII). WII is an innovative risk management instrument that causes low administration and regulation costs. Moreover, index insurance is plagued neither by moral hazard nor by adverse selection. Nonetheless, WII has been little used to date in agriculture. Design/methodology/approach An extra-laboratory experiment in the form of a multi-period, single-person business simulation game is conducted with farmers as experimental subjects to investigate the reasons for the low willingness to adopt WII. Findings First, the demand for WII decreases as the premium loading increases. Second, a transparent communication of the loading reduces demand, indicating that farmers refrain from transactions if they feel that the other party earns (too) much money. Third, communicating to farmers that the index insurance has been subsidized raises demand even though insurance costs in terms of loading are kept constant. This can be taken as an indication that farmers interpret subsidies as a signal for profitable action. Originality/value Using an experimental approach and going beyond observational research, this study investigates the prominent question of farmers’ risk management and innovation adoption behavior, and, in particular, the behavioral effect of subsidies. Using a randomized controlled trial, the real behavior of real subjects with real incentives is studied under controlled experimental conditions. Compared to prior studies, the external validity of the experiment is improved by recruiting farmers instead of a convenience group of students.

scholarly journals Twenty years of Hendra virus: laboratory submission trends and risk factors for infection in horses

2016 ◽  
Vol 144 (15) ◽  
pp. 3176-3183 ◽  
Author(s):  
C. S. SMITH ◽  
A. McLAUGHLIN ◽  
H. E. FIELD ◽  
D. EDSON ◽  
D. MAYER ◽  
...  
Keyword(s):  
Risk Management ◽  
Animal Health ◽  
Management Strategies ◽  
Case Definition ◽  
Hendra Virus ◽  
Reference Laboratory ◽  
Detection Rates ◽  
Laboratory Staff ◽  
Risk Management Strategies ◽  
The Government

SUMMARYHendra virus (HeV) was first described in 1994 in an outbreak of acute and highly lethal disease in horses and humans in Australia. Equine cases continue to be diagnosed periodically, yet the predisposing factors for infection remain unclear. We undertook an analysis of equine submissions tested for HeV by the Queensland government veterinary reference laboratory over a 20-year period to identify and investigate any patterns. We found a marked increase in testing from July 2008, primarily reflecting a broadening of the HeV clinical case definition. Peaks in submissions for testing, and visitations to the Government HeV website, were associated with reported equine incidents. Significantly differing between-year HeV detection rates in north and south Queensland suggest a fundamental difference in risk exposure between the two regions. The statistical association between HeV detection and stockhorse type may suggest that husbandry is a more important risk determinant than breedper se. The detection of HeV in horses with neither neurological nor respiratory signs poses a risk management challenge for attending veterinarians and laboratory staff, reinforcing animal health authority recommendations that appropriate risk management strategies be employed for all sick horses, and by anyone handling sick horses or associated biological samples.

scholarly journals Risk Management in Agricultural Holdings in Bulgaria

2021 ◽  
Vol 27 (3) ◽  
pp. 70-83
Keyword(s):  
Risk Management ◽  
Agricultural Sector ◽  
Management Strategies ◽  
Integrated Approach ◽  
Methodological Framework ◽  
Economic Activities ◽  
Risk Management Process ◽  
Risk Management Strategies ◽  
Process Risk ◽  
The Government

The developing uncertainties, risks and crises related to the natural environment, technology, economic and political environment, as well as globalization, still pose a challenge to addressing risk management in the agricultural sector in Bulgaria. The purpose of the article is to make an analysis of risk management in agricultural holdings and, on this basis, to identify generalized conclusions and suggestions for improving the process. Risk management often depends on the economic activities and internal attitudes of farm managers. The methodological framework of the study includes: 1) Theoretical review of risk management in the agricultural sector, identifying the sources of uncertainty and risk, the ability of farmers to use different risk management strategies, as well as the dependence of risk management on the perceptions of farmers and the measures taken by the government; 2) Methodological framework of the study of risk management in agricultural holdings; 3) Recommendations for improving the risk management process. The analyses in the article present the results of university project NI 16/2018 Integrated approach to risk management in the agricultural sector.

scholarly journals Perceptions of wheat producers towards risk and risk management strategies: A case study from Turkey

2019 ◽  
Vol 49 (12) ◽  
Author(s):  
Seyit Hayran
Keyword(s):  
Risk Management ◽  
Management Strategies ◽  
Policy Instruments ◽  
Data Set ◽  
Wheat Market ◽  
Risk Management Strategies ◽  
Risk Sources ◽  
The Government ◽  
The Impact

ABSTRACT: In this study, risk perception of wheat producers in Turkey was examined based on a case study conducted in Bitlis Province. The data set used in the study was obtained from 157 farmers randomly. Factor analysis was employed to classify risk sources and management strategies, and then multiple regression was used to investigate the relationship between farmers perceptions and some characteristic. Results of this study have shown that economic-based risks were perceived more strongly by farmers. Farmers’ also used more than one risk management strategy to minimize the impact of the risks they face. So, in order to ensure social and economic sustainability and predictability in wheat production and wheat market, the government should be considered preventive policy instruments and interventions to prevent fluctuations in input and output prices.

scholarly journals Designing weather index insurance of crops for the increased satisfaction of farmers, industry and the government

2019 ◽  
Vol 25 ◽  
pp. 100189 ◽  
Author(s):  
Paresh Shirsath ◽  
Shalika Vyas ◽  
Pramod Aggarwal ◽  
Kolli N. Rao
Keyword(s):  
Index Insurance ◽  
Weather Index ◽  
Weather Index Insurance ◽  
The Government

scholarly journals Economic Sustainability and Multiple Risk Management Strategies: Examining Interlinked Decisions of Small American Farms

2021 ◽  
Vol 13 (4) ◽  
pp. 1741
Author(s):  
Sudip Adhikari ◽  
Aditya R. Khanal
Keyword(s):  
Risk Management ◽  
Management Strategies ◽  
Economic Sustainability ◽  
Small Farms ◽  
Strategic Decisions ◽  
Multiple Factors ◽  
Risk Management Strategies ◽  
Land Holdings ◽  
Multivariate Probit Models ◽  
The Government

Economic viability of small farms and farming businesses depends on multiple factors. These farms have limited production and financial resources to maintain their operation. Therefore, to sustain farming, adopting appropriate risk management strategies is a pivotal decision for small farmers. We surveyed Tennessee’s small farms and utilized multivariate probit models to study factors influencing the adoption of various risk management strategies. Our findings suggest that the decisions related to the adoption of risk management strategies are significantly interlinked. Along with factors representing the operator’s age, education, and farm operator’s income and land holdings, we also found that the government incentives (payments), smartphones, and farmers’ continuation plan significantly influence the strategic decisions of adopting risk management strategies.

scholarly journals Perception and risk management strategies for ranchers and their determinants: a case study from Turkey

2021 ◽  
Vol 51 (6) ◽  
Author(s):  
Seyit Hayran ◽  
Murak Külekçi ◽  
Aykut Gül
Keyword(s):  
Risk Management ◽  
Management Strategies ◽  
Farm Income ◽  
Least Squares Regression ◽  
Data Set ◽  
Income Uncertainty ◽  
Perceptions Of Risk ◽  
Risk Management Strategies ◽  
Risk Sources ◽  
The Government

ABSTRACT: In this study, beef cattle farmers’ perceptions of risk and risk management strategies, and their determinants were analyzed using factor analysis and partial least squares regression analysis. The data set used in this study came from a survey conducted in Erzurum Province. The results demonstrated that variability in fodder price, insufficient farm income, uncertainty in government policies were perceived as the most important risks. Clean cattle shelter, off-farm income, monitoring and preventing livestock diseases were perceived as the most important risk management strategies. Results, also, demonstrated that some characteristics of farmers affected farmers’ perceptions. In this study, it was identified that the most important risk sources were economics-based. So, it was recommended that the government policy should be focused on preventing the fluctuations in input/output prices.

scholarly journals MANAJEMEN RISIKO USAHA PENANGKAPAN IKAN LAUT DENGAN ALAT TANGKAP GILLNET DI PULAU BAAI, KOTA BENGKULU

2020 ◽  
Vol 6 (2) ◽  
pp. 133
Author(s):  
Febi Yulianti ◽  
Ketut Sukiyono ◽  
Satria Putra Utama
Keyword(s):  
Risk Management ◽  
Descriptive Analysis ◽  
Management Strategies ◽  
Fishing Ground ◽  
Fishing Gear ◽  
Fishing Activity ◽  
Fishing Trip ◽  
Risk Management Strategies ◽  
The Government ◽  
Sources Of Risks

Bisnis perikanan selalu dihadapkan dengan resiko ketidakpastian, termasuk upaya penangkapan ikan menggunakan alat tangkap Gilnett. Identifikasi sumber risiko, dampak dan strategi risiko penting, tidak hanya untuk bisnis tetapi juga bagi pemerintah untuk merancang intervensi yang tepat. Penelitian ini bertujuan untuk (1) mengidentifikasi sumber risiko, (2) menganalisis probabilitas dan efek risiko, dan (3) menganalisis strategi manajemen risiko. Pemilik atau kapten kapal dari dua puluh tujuh unit kapal yang menggunakan alat tangkap Gilnett disensus dan diwawancarai dengan kuesioner. Data yang dikumpulkan meliputi karakteristik responden, sumber risiko, dampak risiko, aspek operasional, harga dan pasar bisnis perikanan yang dilakukan. Analisis deskriptif dan analisis manajemen risiko diterapkan untuk menjawab tujuan penelitian. Hasil penelitian menunjukkan bahwa sumber risiko yang terjadi paling besar adalah risiko operasional pada sumber risiko cuaca yang tidak dapat diprediksi, ketidakpastian hasil tangkapan, dan permodalan. Pada usaha penangkapan ikan laut di Kota Bengkulu, nilai probabilitas berdasarkan lama melaut dan nilai tangkapan ikan, yaitu sebesar 32,64% dan 48,40%. Nilai dampak risiko berdasarkan lama melaut dan nilai tangkapan sebesar Rp9.948.578,25 dan Rp548.793.316,42. Hasil studi menyimpulkan bahwa strategi yang dapat dilakukan dalam mengelola risiko, yang meliputi (a) pemanfaatkan informasi cuaca seoptimal mungkin, (b) membiasakan menabung ketika hasil melimpah, (c) perluasan fishing ground di luar daerah tangkapan tradisionalnya, (d) ketepatan area pengkapan (fishing ground), (e) perpanjangan lama melaut, dan (f) diversifikasi vertikal (hilirisasi) hasil tangkapan.Title: Risk Management of Fishing Activity Using Gillnet Fishing Gear in Baai Island, BengkuluFishery business is always faced with uncertainty risks, including fishery business using Gilnett fishing gear. The identification of sources of risk, impacts and risk strategies are important not only for businesses but also for the government to design appropriate interventions. This research aimed to (1) identify the sources of risks, (2) analyze the probabilities and risk effects, and (3) analyze the risk management strategies. The owner or captain of the twenty-seven vessel units who use the Gilnett fishing gear were censused and interviewed with a questionnaire. Data was collected includes the characteristics of the respondents, sources of risks, risk impacts, operational aspects, prices and markets of the business of fishing. Descriptive analysis and risk management analysis were applied to answer research objectives. The results of the study indicate that the greatest source of risk is an operational risk on sources of unpredictable weather risks, uncertainty about catches, and capital. Fishing activity in Bengkulu City, the probability value is based on the fishing trip period and the catch value is 32.64% and 48.40%. The value of the risk impact is based on the fishing trip period and the value of the catch is IDR 9,948,578.25 and IDR 548,793,316.42. The results of the study conclude that strategies that can be carried out in managing risks including (a) utilizing the most optimal weather information, (b) getting used to saving when the abundant results, (c) expanding fishing ground outside the traditional catchment area, (d) accuracy of the catching area (fishing ground), (e) prolongation of fishing day, and (f) vertical diversification (downstreaming) of catches. 

scholarly journals Turkish Insurance Companies’ Risk Management Strategies and Structures: A Survey Study

2020 ◽  
Vol 12 (8) ◽  
pp. 12
Author(s):  
Suna Ozyuksel ◽  
Murat Gezgin
Keyword(s):  
Risk Management ◽  
Insurance Industry ◽  
Management Strategies ◽  
Cyber Attacks ◽  
Survey Study ◽  
Insurance Companies ◽  
Insurance Sector ◽  
Political Risks ◽  
Risk Management Strategies ◽  
Set Up

Insurance industry is one of the cornerstones of both the financial system and the economy as it undertakes global risks and minimizes losses. The compensation of major losses by insurance companies means rapid recovery and resumption for investors. The insurance sector is very important for the development of the country's economy as it contributes premium volume and its support to investors as for compensation of the losses. However, the insurance sector faces a great deal of risks. Therefore, it is of importance for insurance companies to have a robust risk management system to constitute a basis for the growth of economy. Risk management enables insurance companies to identify measuring and analyzing risks, safeguard their assets, minimize potential risks and take them under control. The aim of this study is the evaluation of the risks assumed by insurance companies in Turkey and their risk management perspectives to struggle such major risks through a survey. This survey makes an evaluation about how insurance companies’ risk management departments are structured, risks that insurance companies foresee, their strategies to deal with such risks. Among the important findings of the survey; Top 10 risks for insurance companies are: “interest rate and foreign exchange rate fluctuation, political risks, economic slowdown, economic crisis, regulations, cyber-attacks, incompliance with the applicable legislation, increasing competition, digitalization/insurtech, business continuity interruption” and the second finding is Turkish insurance industry’s risk management set-up has a robust structure even though it has a small share in global insurance market and Turkish financial sector.

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