scholarly journals Application of Black Scholes Method in Determining Agricultural Insurance Premium Based On Climate Index Using Historical Burn Analysis Method

2021 ◽  
Vol 9 (3) ◽  
pp. 103
Author(s):  
Aminatus Sholiha ◽  
Mohamat Fatekurohman ◽  
I Made Tirta
Keyword(s):  
Insurance Premium ◽  
Climate Index ◽  
Index Insurance ◽  
Analysis Method ◽  
Agricultural Insurance ◽  
Insurance Premiums ◽  
Black Scholes ◽  
Quality Testing ◽  
Insurance Payment ◽  
Instrument Quality

Climate index insurance is an insurance that provides reimbursement for losses due to decreased harvest rates or crop failures caused by weather. The use of Historical Burn Analysis (HBA) method in determining climate index based on rainfall resulted in a concept of the agricultural insurance payment in Pasuruan Regency. The application of The Black Scholes method in determining agricultural insurance premiums is obtained when rainfall more than 17 mm the premium is Rp 221,234. If the rainfall are 13 mm ≥ RR < 17 mm, the nominal premium paid by farmers to the insurance party is Rp 147,489. Respondents in the study were farmers who owned rice fields. Instrument quality testing (questionnaire) using validity test and reliability test using the help of SPSS statistical software. It can be concluded that the questionnaire is valid and reliable. Based on the results of the questionnaire, farmers considered that the nominal agricultural insurance premiums are in accordance with farmers' income.

scholarly journals Application of Historical Burn Analysis Method in Determining Agricultural Premium Based on Climate Index Using Black Scholes Method

2020 ◽  
Vol 4 (1) ◽  
pp. 28
Author(s):  
Devi Ariyanti ◽  
Riaman Riaman ◽  
Iin Irianingsih
Keyword(s):  
Climate Index ◽  
Index Insurance ◽  
Analysis Method ◽  
Insurance Policy ◽  
Crop Failure ◽  
Agricultural Insurance ◽  
Insurance Program ◽  
Black Scholes ◽  
Planting Season ◽  
Maximum Limit

Farmers often suffer losses due to crop failure. The failure of the harvest is influenced by one of them is flooding, especially in Bandung which is quite frequent rain. Therefore one of the government's efforts to minimize losses from crop failures is the existence of an agricultural insurance program. The insurance system used is climate index insurance where the climate index is not plant insurance. This study aims to get a large premium to be paid by farmers using the Black-Scholes method. Meanwhile, to determine the climate index using the Historical Burn Analysis method. The results of this study are getting a variety of trigger values and exit values as well as the amount of premium that must be paid by farmers every planting season. Trigger values represent the minimum full payment limit. The exit value represents the maximum limit for no payment. The premium value obtained based on the selected trigger value also varies and is large enough so that it can be considered by farmers in choosing an agricultural insurance policy. Therefore, the method used must still be investigated to adjust to farmers, especially in Bandung.

scholarly journals PENENTUAN NILAI PREMI ASURANSI PERTANIAN BERBASIS INDEKS CURAH HUJAN PADA KOMODITAS KEDELAI YANG DISIMULASI MENGGUNAKAN DISTRIBUSI WEIBULL

2020 ◽  
Vol 9 (4) ◽  
pp. 257
Author(s):  
NI PUTU AYUNDA SURYA DEWI ◽  
KOMANG DHARMAWAN ◽  
KARTIKA SARI
Keyword(s):  
Insurance Premium ◽  
Weather Generator ◽  
Rainfall Data ◽  
Simulated Rainfall ◽  
Crop Failure ◽  
Agricultural Insurance ◽  
Stochastic Weather Generator ◽  
Insurance Premiums ◽  
Rainfall Index ◽  
Insurance Costs

Agricultural insurance protects farmers who experience crop failure. This study aims to calculate the value of agricultural insurance premium by applying simulated rainfall index-based using stochastic weather generator on soybean commodities in Negara sub-district. This study are used rainfall data to determine the probability of the transition, then perform rainfall simulations using the Stochastic Weather Generator method to obtain trigger values and continued with the calculation of agricultural insurance premiums. Results of this study provide the value that higher trigger is taken, the greater the insurance premium that must be paid. The value of insurance premiums to be paid is 4,18% - 5,66% of insurance costs Rp2.605.000,00.

scholarly journals PENENTUAN NILAI PREMI ASURANSI PERTANIAN BERBASIS INDEKS SUHU PERMUKAAN MENGGUNAKAN METODE BURN ANALYSIS

2018 ◽  
Vol 7 (4) ◽  
pp. 322
Author(s):  
A.A DWI MARSITA ANGGRAENI ◽  
KOMANG DHARMAWAN ◽  
DESAK PUTU EKA NILAKUSMAWATI
Keyword(s):  
Risk Management ◽  
Surface Temperature ◽  
Insurance Premium ◽  
Analysis Method ◽  
Agricultural Insurance ◽  
Temperature Index ◽  
Premium Payment ◽  
Long Run ◽  
Related Risk ◽  
Climate Parameter

Temperature is an important factor in the production of agricultural commodities. For this reason, goverments needs to protect farmers in order to continue their farming. Climate-based agricultural insurance is an alternative to climate-related risk management. Insurance premium is given when the temperature index lower than the pre determined trigger index. The purpose of this study is to determine the stages and assumptions in determining the value of agricultural insurance premiums based on surface temperature index on cocoa commodities using the method of burn analysis. The temperature index was determined using the burn analysis method with the temperature as the climate parameter. Trigger values ??are determined based on long run times. In this paper, the result is that when the temperature index lower than the determined trigger value, trigger payments as much as Rp.10.931.960,40 / Ha based on trigger index as many 26.145 ° C, so amount of premium payment equals Rp 215.776.

scholarly journals Determining Agricultural Premium Insurance in Malang City using Black Scholes Model

2021 ◽  
Vol 2 (2) ◽  
pp. 80-87
Author(s):  
Herlia Widi ◽  
Dea Nisa Rahma Lani ◽  
Faridatul Hasanah
Keyword(s):  
Secondary Data ◽  
Insurance Premium ◽  
Rice Production ◽  
Strongly Correlated ◽  
Literature Study ◽  
Agricultural Insurance ◽  
Black Scholes Model ◽  
Black Scholes ◽  
Premium Price

This study examines the determination of rainfall-based agricultural insurance premium prices using the Black-Scholes model. The Black-Scholes model was originally used to determine the price of European-type options. The research method used is a literature study with secondary data collection. The data used in this study are rainfall data and rice production results in the city of Malang from 2015 to 2020. Based on the results and discussion, rainfall which is strongly correlated with rice production results is in quarter 2. The premium results obtained are different according to the desired percentile. In addition to percentiles, taking R_0 also affects the premium price. When R_0=322, the premium price tends to be cheaper than R_0=271.

scholarly journals Estimation of the Amount of Rice Crop Insurance Premium in the Citarum River Basin

2020 ◽  
Vol 1 (1) ◽  
pp. 33-39
Author(s):  
Nurfadhlina Abdul Hali ◽  
Muhammad Faiz Rifqi ◽  
Endang Soeryana
Keyword(s):  
River Basin ◽  
Crop Insurance ◽  
Crop Productivity ◽  
Insurance Premium ◽  
Rice Crop ◽  
Normal Curve ◽  
Mathematical Methods ◽  
Insurance Premiums ◽  
Productivity Data ◽  
Curve Method

Determination of crop insurance premiums in the Citarum River basin can be calculated by mathematical methods. One of the methods of calculation of the premium that is the normal curve methods with data on crop productivity is assumed to be Gaussian. In this thesis are discussed in crop insurance premium calculations Areas Citarum River basin West Bandung Regency with normal curve method with a significant level of coverage. These methods are used because data on crop productivity gained Gaussian. Normal curve method is used without using the assumption of coefficients of variation, and try for some level of coverage. Application materials used are rice crop productivity data in the Citarum River basin of West Bandung Regency in 2008-2014. This research resulted in the value of the rice crop insurance premiums for farmers in the area based on a certain level of coverage.

Farmer preference for swine price index insurance

2019 ◽  
Vol 12 (1) ◽  
pp. 122-139
Author(s):  
Yanyuan Zhang ◽  
Wuyang Hu ◽  
Jintao Zhan ◽  
Chao Chen
Keyword(s):  
Risk Perception ◽  
Local Governments ◽  
Price Index ◽  
Probit Model ◽  
Insurance Premium ◽  
Index Insurance ◽  
Agricultural Cooperatives ◽  
Content Type ◽  
Agricultural Income ◽  
Willingness To Buy

Purpose The purpose of this paper is to examine farmer preference for swine price index insurance in China focusing on whether Chinese farmers are willing to consider purchasing swine price index insurance, the premium they would like to pay, as well as the extend of heterogeneity in their preferences. Design/methodology/approach A sample of 443 swine farmers in Jiangsu and Henan provinces is collected and analyzed. An Ordered Probit model is used to analyze farmers’ willingness to buy swine price index insurance and a Tobit model is used to analyze farmers’ willingness to pay (WTP) for insurance premium. Findings Results show that some farmers are not willing to purchase swine price index insurance. However, WTP of majority of farmers is higher than what is prescribed in the current insurance policy. Factors affecting farmers’ willingness to buy varied between two provinces. Experience in purchasing traditional swine insurance and risk perception affect farmers’ willingness to buy in Jiangsu province, while joining agricultural cooperatives, experience in purchasing traditional swine insurance and understanding of swine price index insurance affect farmers’ willingness to buy in Henan province. Farmers with non-agricultural income, longer years of swine breeding, higher degree of specialization, experience in purchasing traditional insurance, higher understanding of swine price index insurance and trust in local governments, stronger risk perception and risk preference, and not being a member of agricultural cooperatives have higher WTP. Originality/value Few studies have been conducted on swine price index insurance in China. Even less information, to the authors’ knowledge, is available on farmer preferences. The research provides a timely contribution to understand the Chinese swine price index insurance market from the perspectives of farmers.

scholarly journals Analysis of the Brazilian Program of Subsidies for Rural Insurance Premium: Evolution from 2005 to 2014

2016 ◽  
Vol 10 (7) ◽  
pp. 87
Author(s):  
Pedro Loyola ◽  
Vilmar Rodrigues Moreira ◽  
Claudimar Pereira Da Veiga
Keyword(s):  
Risk Mitigation ◽  
Supply And Demand ◽  
Insurance Coverage ◽  
Descriptive Analysis ◽  
Insurance Premium ◽  
Growth Potential ◽  
Agricultural Policies ◽  
Agricultural Insurance ◽  
Brazilian Government ◽  
General Data

<p>Rural insurance is inserted in the field of agricultural policies to mitigate risks that farmers face. It was an innovation for the Brazilian government from the implementation standpoint, despite the existence of similar programs in other countries. The purpose of this paper is to assess the recent evolution of the Brazilian Rural Insurance Premium Subsidy Program (PSR) and its main variables: amount insured area, policies, average area, benefiting producers, total premiums involved and total subsidy. The study examined in detail the PSR representation by region and farming. In order to evaluate the results of this program on agricultural policy, an exploratory and descriptive analysis was performed with the objective of studying the evolution of the Brazilian rural insurance in the context of PSR, using the information available in the Ministry of Agriculture, Livestock and Supply (MAPA) about the program. The information and data were collected between July and August 2015. The study was based on data collected from 2005 to 2013 with some general data of 2014 program included in the study. Even though the focus of the analysis was on the most recent years, 2009-2013. Data analysis revealed that the increased supply and demand for rural insurance is in the South and in the agricultural modalities for grains and fruits, with growth potential in other sectors and other regions in the country. PSR, as public policy, was responsible for the expansion of the rural insurance market in Brazil, encouraging and providing the access of producers to agricultural insurance by subsidizing the premium fee. Although this expansion has been slow and gradual, Brazil had in 2013 about 13.8% of the agricultural area with rural insurance coverage. This reveals the need for expanding the program to popularize this important risk mitigation tool.</p>

scholarly journals Solving Black–Scholes equations using fractional generalized homotopy analysis method

2020 ◽  
Vol 39 (4) ◽  
Author(s):  
S. R. Saratha ◽  
G. Sai Sundara Krishnan ◽  
M. Bagyalakshmi ◽  
Chee Peng Lim
Keyword(s):  
Homotopy Analysis Method ◽  
Analysis Method ◽  
Black Scholes ◽  
Homotopy Analysis

scholarly journals Meeting liberalization of motor liability insurance premium in Serbia

2020 ◽  
Vol 36 (4) ◽  
pp. 44-77
Author(s):  
Jelena Doganjić ◽  
Živorad Ristić
Keyword(s):  
Traffic Safety ◽  
Traffic Accidents ◽  
Insurance Premium ◽  
Third Party ◽  
Liability Insurance ◽  
Insurance Market ◽  
Previous Period ◽  
Insurance Premiums ◽  
Degree Of Risk ◽  
Definition Of

Free definition of motor third party liability insurance tariffs leads to individual statement of premiums in agreement with the degree of risk the insured are exposed to i.e. their behaviour in the previous period. Using the experience of neighbouring countries, which have introduced a system of liberalization of motor third party liability insurance premiums, with prior quality preparation, Serbia could establish the liberalization of motor third party liability insurance premiums which could significantly contribute to insurance market advancement. This can also affect the behaviour of drivers, whereby we would raise the level of traffic safety and reduce the consequences and damages caused by traffic accidents.

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