Abstract
In recent years, weather risk has become a major risk for agricultural production, especially for China which has six climate zones and has complex terrain. Due to the high risk of adverse selection, high moral hazard, and high underwriting and claim reasons, traditional agricultural insurance has been unable to deal with weather risk. Weather index insurance immediately emerged. In the paper, after studying the features and pricing methods, it selects Wangqing county 1998-2012 fifteen years meteorological data and rice yield data, chooses the temperature as an index, and use the value of the average daily temperature data and production data to determine the premium rates.
Highlights
Weather index insurance refers to the indexation of the impact of one or more climatic conditions on the extent of crop losses
Empirical Pricing Method Empirical pricing method is a pricing method that collects historical loss data of some weather index insurance in the past several years and makes pricing based on empirical data
SUMMARY Based on the study of rice temperature index insurance in Wangqing County, a set of process for pricing weather index insurance is sorted out, and the concept of anomaly in meteorology is innovatively introduced into the design of temperature index, which has a good explanatory effect
Summary
Weather index insurance refers to the indexation of the impact of one or more climatic conditions on the extent of crop losses. In 2003, the World Bank piloted the Rainfall Index Insurance in India for the first time, and its success shows a high feasibility. Inspired by this pilot project, insurance based on more weather indices (such as flood index, drought index, high temperature index, rainfall index, etc.) has been proposed one after another.
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