Claim Assessment Models in Crop Insurance

Abstract

Agricultural insurance is considered one of the engines of the development of the agricultural industry. Without a developed of agricultural insurance market, farmers cannot manage their risks to protect their investments, which leads us to say that, in this context, the modernization of the agricultural industry will not succeed. Investments in technology to modernize agriculture in order to increase productivity are very important, and in order to have stability, there must be tools on the insurance market to protect farmers. The larger the insurance market, the more diversified protection instruments exist as options for the farmers. In order for the insurance market to be able to develop and come to farmers with diversified products, the involvement of the state with different financing measures / schemes is needed. At the international level, depending on each country, the state is involved with different schemes. The more the state is involved, the more developed the insurance market is, which led to an increase in the well-being of the agricultural sector. The impact on the insurance market was not only in diversifying the protection instruments but also in reducing their cost. This has led to the possibility for farmers to transfer to the insurance market several types of risks at sustainable costs. Starting from the importance of the way in which a claim assessment is performed, in this paper we propose to make a comparative study between a classical method of claim assessment in the case of agricultural crops and a modern method of assessment based on satellite data/images. The comparative analysis aims to highlight the impact of different methods in establishing the final value that the farmer is going to collect from the insurer.