scholarly journals A New Tool for Covering Risk in Agriculture: The Revenue Insurance Policy

Risks ◽  
2021 ◽  
Vol 9 (7) ◽  
pp. 131
Author(s):  
Angelo Frascarelli ◽  
Simone Del Sarto ◽  
Giada Mastandrea
Keyword(s):  
Risk Management ◽  
Agricultural Sector ◽  
Insurance Coverage ◽  
Price Volatility ◽  
Insurance Companies ◽  
Insurance Policy ◽  
Agricultural Insurance ◽  
Revenue Insurance ◽  
The Common ◽  
Using Data

Over the last years, the agricultural sector has faced increasing risks related not only to production activities, but also to climate adversity and a higher frequency of extreme events. These factors, combined with increased price volatility in the markets, have caused greater exposure to risk for farmers. For this reason, risk management in agriculture has taken on an important role within the Common Agricultural Policy. However, in recent years, gradual disaffection of farmers, low penetration of insurance in the arable sector, and a greater need for insurance coverage against market risks have characterised the subsidised risk management system. For all these reasons, starting in 2017, the National Agricultural Insurance Plan has provided new possibilities for covering risks. This paper aims to contribute to the debate on risk management linked to the revenue insurance policy recently adopted in Italy. Using data from the Italian Farm Accountancy Data Network, we simulate the application of the revenue insurance policy with a sample of Italian farms operating in the common and durum wheat sectors. The main findings show that the revenue insurance policy stipulation is, overall, sustainable for both farms and insurance companies.

scholarly journals More insurance subsidies for European farmers – is it needed?

2015 ◽  
Vol 9 (4) ◽  
pp. 33-38
Author(s):  
Anna Lóránt ◽  
Maria Farkasné Fekete
Keyword(s):  
Risk Management ◽  
Developing Countries ◽  
Agricultural Sector ◽  
Contingent Valuation Method ◽  
Market Price ◽  
Price Volatility ◽  
Jel Classification ◽  
Policy Outcomes ◽  
Agricultural Risk ◽  
Agricultural Insurance

In addition to traditional sources of uncertainties, such as market price volatility and animal and plant health-related risks, the impacts of climate change have recently become a major concern in the agricultural sector throughout the world. Insurance has been commonly proposed as a key instrument in farm risk management, and agricultural insurance schemes have become more widespread both in developed and developing countries. We conducted a case study in the UK to investigate farmers’ risk perception and willingness to pay for crop insurance by using contingent valuation method (CVM). Similarly to the experience from developing countries, we found that farmers are less willing to pay for insurance, however they do take actions to reduce their risks. While these results suggest that the provision of premium subsidies to European farmers can be justified; in order to avoid counter-productive policy outcomes, one may consider the introduction of a risk-based approach in agricultural risk management. JEL classification: Q14

scholarly journals Insurance principles as a methodological framework for maintenance and growth of insurance relations in agriculture

2017 ◽  
pp. 38-49
Author(s):  
Oleksandr Vilenchuk
Keyword(s):  
Agricultural Production ◽  
Agricultural Sector ◽  
Insurance Coverage ◽  
Insurance Companies ◽  
State Support ◽  
Agricultural Insurance ◽  
Economic Interests ◽  
Agricultural Enterprises ◽  
Fair Balance ◽  
Efficient Distribution

The article emphasizes the necessity of adherence to the insurance principles as a decisive condition for maintenance and growth of mutually beneficial insurance relations in the agricultural sector. It is justified that reconciliation of social and economic interests between parties of the insurance market is based on a framework of principles that serve as guidelines for providing insurance coverage to entrepreneurial entities or individual customers and facilitating the pursuit of insurance / reinsurance activities by insurance companies. With the purpose of streamlining methodologies, the author’s approach to classifying insurance principles is developed. With the aim of striking a fair balance between the property interests of agents and insurance companies, the key insurance principles are divided according to the following three criteria: basic insurance principles; principles that are intended to neutralize financial and economic risks of insurance companies; fundamental principles of agricultural insurance. Given the riskiness of agricultural production, it is found that relations between agricultural enterprises and insurance companies should be built on the following principles: actuarial balance; motivation for insurance protection; maintaining the circulation of current assets of agricultural enterprises; voluntary involvement, accessibility and subsidiarity. Presumably adherence to the above principles will create prerequisites for efficient distribution / redistribution of risks and responsibilities between insurance parties. The need is stressed to practically implement the major principles established in Article 3 of the Law of Ukraine “On peculiarities of agricultural products insurance with state support” of 9 February 2012, which address insurance of agricultural production with state support for efficient interaction between insurers, insured parties and the state. This will guarantee insurance protection of agricultural enterprises, thereby enhancing food safety of the country in space and time.

scholarly journals Factors influencing and dynamics of the agricultural insurance market

VUZF Review ◽  
2021 ◽  
Vol 6 (2) ◽  
pp. 42-49
Author(s):  
Nataliya Tanklevska ◽  
Vitalina Yarmolenko
Keyword(s):  
Crop Production ◽  
Agricultural Sector ◽  
The State ◽  
Insurance Market ◽  
Insurance Companies ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
Agricultural Enterprises ◽  
Insurance Sector ◽  
Factors Influencing

The article is aimed at identifying modern features of insurance in the agricultural sector of the Ukrainian economy and defining the factors of influence on the agricultural insurance market. The article discloses interpretation of the terms of «insurance» and «agricultural insurance» and also presents the types of possible risks arising in the activities of agricultural enterprises. The performance indicators of leading insurance companies in the field of agricultural insurance are analyzed. The current state and dynamics of insurance of agricultural risks, which arise both in the field of crop production and in livestock, are researched. This will allow predicting the future prospects of the market for insurance services and products, as well as finding possible optimal ways to solve the problems of product insurance, faced by the agricultural producers. The main factors influencing the efficiency of the insurance market in the agricultural insurance sector are allocated. The basic principles of insurance of agricultural products with the State support are analyzed. It is defined that the further development of agricultural insurance should be directed towards creating a profitable and safe environment for all participants in the agricultural market, which provides for the distribution of risks between agricultural producers, processing enterprises, banks, insurance companies and the State. The agricultural insurance of risks creates possibilities for advantageous harmonizing the interests of participants in the agricultural insurance market and the State as a party whose first priority is to ensure stable economic growth.

scholarly journals Measures of Efficiency of Agricultural Insurance in Italy, Economic Evaluations

Risks ◽  
2018 ◽  
Vol 6 (4) ◽  
pp. 126 ◽  
Author(s):  
Fabian Capitanio ◽  
Antonio De Pin
Keyword(s):  
Risk Management ◽  
Agricultural Policy ◽  
Management Policy ◽  
Insurance Companies ◽  
Economic Evaluations ◽  
Agricultural Insurance ◽  
Insurance System ◽  
Weather Patterns ◽  
Risk Assessment Models ◽  
Agrarian Policy

Risk management policy in agriculture has become particularly prominent nowadays, considering the evolution of the Common Agricultural Policy (CAP) and climate change. Moreover, the Word Trade Organization places constraints on it. In this context, (1) the aim is to analyze the causes of the loss of effectiveness of the Italian insurance system, unable to deal with the specific coverage demand from agriculture. (2) The analysis is carried out through the economic evaluation of convenience in adhering to the instruments offered by the insurance market to winegrowers in the Controlled and Guaranteed Denomination of Origin (DOCG) area of Conegliano-Valdobbiadene. (3) The study highlights that the subsidized coverage alone is not the most adequate measure of agricultural policy. Adhering to preferential programs implies the drafting of a supplementary insurance policy to minimize the loss function. (4) The current insurance system impasse demonstrates that the producer hardly accepts to policies which do not convert into an immediate income benefit. The European risk management regulation confirms its limits in terms of usefulness and efficiency of the agrarian policy. (5) The prediction of probabilistic increase of severe-weather patterns makes the search for innovative risk assessment models more urgent, models which can combine the different needs of stakeholders: farmers, insurance companies, and society.

scholarly journals PERHITUNGAN HARGA PREMI ASURANSI PERTANIAN YANG BERBASIS INDEKS CURAH HUJAN MENGGUNAKAN METODE BLACK SCHOLES

2017 ◽  
Vol 6 (2) ◽  
pp. 161 ◽  
Author(s):  
IDA AYU GDE KHASMANA PUTRI ◽  
KOMANG DHARMAWAN ◽  
NI KETUT TARI TASTRAWATI
Keyword(s):  
Risk Management ◽  
Agricultural Sector ◽  
Management Tool ◽  
Agricultural Insurance ◽  
High Rainfall ◽  
Premium Payment ◽  
Rainfall Index ◽  
Black Scholes ◽  
As If

Agricultural insurance is insurance in the agricultural sector which is relatively new introduced in Indonesia. Agricultural insurance is based on a rainfall index.  It is a risk management tool that is relatively new in Indonesia. This study was purposed to determine the steps required in determining the value of the rainfall index on agricultural insurance and calculating the contract value of agricultural insurance which had to be paid on the agricultural insurance that is on rainfall index-based by using Black-Scholes method. The result of this research are if the amount of rainfall was 130,4 mm so the amount of premium payment equals Rp. 60.694, as well as if the amount of high rainfall was 179,9  mm so the amount of premium payment equals Rp.902.760.

scholarly journals Legal features of insurance in the agricultural sector

2020 ◽  
pp. 59-63
Author(s):  
O.M. Sadruk ◽  
M.Yu. Pokalchuk
Keyword(s):  
Agricultural Sector ◽  
Legal Regulation ◽  
Agricultural Products ◽  
Insurance Companies ◽  
Index Insurance ◽  
Scientific Article ◽  
State Support ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
The Law

The scientific article Sadruk Oksana Mykolayivna on the topic "Legal features of insurance in the agricultural sector" is devoted to the analysis of the features of insurance of agricultural products. The paper examines such concepts as "agricultural insurance", "risk in agricultural production", "index insurance of agricultural products" and others. The current state of development of agricultural insurance in Ukraine is analyzed, and such characteristic features of modern agricultural insurance as insufficient legal regulation of insurance relations in the agricultural sector are identified; low popularity of insurance among agricultural producers, which is caused by distrust of agricultural producers to insurance companies; insufficient state support for agricultural insurance in the country; insufficient supply from insurance companies and others. In addition, the authors studied the law "On the features of insurance of agricultural products with state support", namely the task of uniting insurers of the Agrarian Insurance Pool and noted the problems of its operation. Finally, the authors noted the need to develop index insurance of agricultural products, referring to the successful experience in such sectors of Ukraine's economy as energy, construction, restaurant business and others. The authors highlight the significant advantages of index insurance, such as low cost, transparency, simplicity of index insurance and the need to involve appraisers at the scene of the insured event. In the conclusions, the authors drew attention to the problems that arise today during the insurance of agricultural products and ways to overcome them. In addition, the article notes a significant step by the state to address the problems that arise during the insurance of agricultural products. Such a solution could be the Law of Ukraine, which provides for the introduction from 2021 of state support for insurance of agricultural products.

Insurance Needs of the Private Practitioner

2017 ◽  
pp. 35-48
Author(s):  
Martin G. Tracy ◽  
Jana N. Martin
Keyword(s):  
Risk Management ◽  
Professional Practice ◽  
Management Education ◽  
Insurance Coverage ◽  
Ancillary Services ◽  
Private Practitioner ◽  
Liability Insurance ◽  
Insurance Companies ◽  
Financial Security ◽  
Definition Of

This chapter introduces clinicians to the types of insurance coverage they should procure before they see their first clients. It discusses the concept of negligence in professional practice and summarizes provisions of professional liability insurance (including prior acts coverage), licensure defense coverage, and the business owner’s policy. It explains the availability of ancillary services, such as risk management education and consultation, from some insurance companies. The chapter makes clear that while professional coverage is essential, personal coverage through disability or income protection insurance and life insurance is just as important to the financial security of the clinician. It provides data regarding the often overlooked risk of disability during a clinician’s working years and considers the definition of “disability” in various policies. It points out that an office overhead policy can ensure that the clinician’s office expenses are paid if the clinician becomes disabled.

Insurance Principles as a Methodological Basis for the Formation of Insurance Relations in the Agricultural Sector of the Economy

2020 ◽  
Vol 2 (97) ◽  
pp. 22-35
Author(s):  
О.T. Prokopchuk ◽  
Keyword(s):  
Financial Stability ◽  
Agricultural Sector ◽  
Financial Economic ◽  
Insurance Market ◽  
Insurance Companies ◽  
Agricultural Insurance ◽  
Methodological Basis ◽  
Professional Activities ◽  
Contractual Relations ◽  
And Function

The specificity of the agrarian production process is associated with numerous risks of various species, which leads to a special formation of relationships between the subjects of the agro-insurance market, which should be based on certain specific principles. The functioning of the agricultural insurance market and, accordingly, the formation of a system of insurance relations in the agricultural sector of the economy is based on certain principles that determine the basis for the functioning of the subject composition of the agricultural insurance market in the context of financial, economic, organizational and legal components. Compliance with fundamental insurance principles ensures the possibility of achieving a balance of property interests of participants in insurance relations. The substantive basis of insurance principles regulates the value system of key subjects of the insurance market when concluding agricultural insurance agreements. In this context, it should be noted that knowledge of the insurance methodology requires an unambiguous interpretation of the essence of the principles of the latter, which is the basis for the formation of insurance relations in the agricultural sector of the economy. Consequently, insurance principles are the basis of insurance activities accompanying all stages of the insurance process, starting with pre-contractual relations, then continuing to support contractual relations and ending with participation in their post-contractual types. In essence, the principles of agricultural insurance make it possible to properly coordinate the professional activities of participants in the agricultural insurance market, aimed at neutralizing the risks of various types of population, reflecting the fundamental principles that provide appropriate conditions for the implementation of the interests of all participants in the specified market in the context of both social and economic types. According to the results of the study, the fundamental (basic) insurance principles are classified into three main groups: first — the principles used as the basis of the process of organizing and conducting insurance activities (group of basic insurance principles); second — for risk management of insurance companies (group of additional insurance principles); third — to include special clauses in insurance contracts (group of selective insurance principles). In addition, a set of principles are highlighted that are specific and function in agricultural insurance, forming a methodological basis for the development and distribution of insurance relations in the agricultural sector of the economy, to which, according to the research results, the following principles are attributed: voluntary participation, mutual interest, tariff justification, food security, subsidies and financial stability. This systematization will allow to properly coordinate the professional activities of participants in both the insurance market and its agricultural insurance segment aimed at neutralizing the risks of various species.

scholarly journals Risk Management Tools for Sustainable Agriculture: A Model for Calculating the Average Price for the Season in Revenue Insurance for Citrus Fruit

Agronomy ◽  
2020 ◽  
Vol 10 (2) ◽  
pp. 198 ◽  
Author(s):  
Alicia Mateos-Ronco ◽  
Ricardo J. Server Izquierdo
Keyword(s):  
Risk Management ◽  
Explanatory Power ◽  
Citrus Fruit ◽  
Average Price ◽  
Agricultural Policies ◽  
Agricultural Insurance ◽  
Management Tools ◽  
Public And Private ◽  
Revenue Insurance ◽  
Price Risks

Risk management in agriculture is at the heart of major reforms in many OECD countries and European agricultural policies. Price risks, which are generally not insurable per se, have been covered by the Common Agricultural Policy (CAP), which has been shaped as a system of protection against market shocks and an instrument for income stabilization. However, there is an increasing propensity to combine the use of public and private risk management tools as well. In Spain, revenue insurance has not yet developed in the same way as other risk coverage insurance, although it is an upcoming target of agricultural insurance policies with the aim of ensuring income stability for agricultural producers. This paper presents the results of the methodology used to draw up a composition index or model of the average price for the season or representative market field price to be used for revenue insurance purposes in citrus fruit. High explanatory power regression models and the analytic hierarchy process (AHP) were used. The results show that the average price for the season obtained reliably represents the market field prices in the country’s various producer areas.

Efficiency of agricultural insurance with state support

2021 ◽  
pp. 39-45
Author(s):  
V.V. Maslova ◽  
◽  
G.M. Savkina ◽  
Keyword(s):  
Agricultural Sector ◽  
Current Model ◽  
Insurance Companies ◽  
Economic Regulation ◽  
Insurance Company ◽  
State Support ◽  
Agricultural Insurance ◽  
Agricultural Producers ◽  
Current State ◽  
Insurance Mechanism

The article is devoted to one of the most important areas of economic regulation of the agricultural sector of the economy - the development of an agricultural insurance mechanism with state support. The authors assessed the current state of agricultural insurance. It was revealed that the current model of agricultural insurance with state support does not provide agricultural production with effective insurance protection and does not contribute to the activation of investment activities of agricultural producers. The level of insurance compensation received by agricultural organizations is insignificant, government subsidies do not reach farmers, but remain in the assets of insurance companies. In agricultural insurance, a truncated system of the insurer’s liability to the policyholder is used, which allows the insurer to significantly reduce its liability. The main directions of improving the agricultural insurance mechanism are associated with the formation of equivalent relations between the parties to the insurance process. It is necessary to create a state insurance company specializing only in agricultural insurance. The necessity of amendments to the legislation on agricultural insurance in terms of reducing the size of franchises and developing investment functions of insurance has been substantiated.

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