Amount Of Insurance Premiums Research Articles

DEVELOPMENT OF FINANCIAL TECHNOLOGIES IN THE REPUBLIC OF KAZAKHSTAN (on the example OF JSC IC NOMAD Insurance)

The article is devoted to assessing the impact of financial technologies on the well-being of insurance companies, to identify negative factors hindering their implementation and development and to suggest ways to reduce this impact. The research used general scientific methods of analysis and synthesis, as well as statistical, correlation and regression methods. The empirical base of the study was made up of official reports and materials of JSC IC Nomad Insurance. The financial technology market in Kazakhstan is one of the fastest growing in Asia. Due to the achieved high level of Internet access penetration (over 90%), the country's fintech sector has huge growth potential. At the same time, large organizations, including companies from the telecommunications sector, are experimenting with the development and implementation of new products and services. And this will contribute to the emergence of new financial technologies in the insurance sector and the emergence of new challenges that require study and solution, which will be the direction of future research. Recommendations have been developed to optimize insurance activities using financial technologies. The company should introduce a number of insurance products and apply technologies to create a "smart" image of the insurance object. Forecasting of the values of the net amount of insurance premiums for the coming years was carried out, the data of which indicates the continuation of the positive dynamics of the activities of JSC IC Nomad Insurance.

Mitigation of The Risk of Failed Harvest Pond Farming Fisheries Using The Calculating of The Premium Through The Approach to The Principle of Expectation Value

Pond cultivation is a promising business to be engaged in at this time, the demand for fish in the market is high, it opens opportunities for entrepreneurship in the field of fish cultivation. It is undeniable that several factors will cause crop failure in fish farming, both from weather factors and in the livestock process. If such an unexpected thing happened, the cultivators would be slightly affected. Therefore, there is a need for special insurance to protect farmers from financial losses due to possible risks, namely Fishery Microinsurance. This study aims to determine a reasonable amount of insurance premiums for small-scale shrimp pond aquaculture cultivators using the expectancy value principle calculation method. The data on the number of events uses the Poisson distribution, while the loss data uses the Exponential distribution in Pandeglang Regency. Next use the Maximum Likelihood Estimation method to calculate the parameter estimate. After that, the results of the parameter estimation are used to search for a collective risk model. Thus, the result of the premium calculation in this study was Rp 25.893.046

АНАЛИЗ ПОКАЗАТЕЛЕЙ РАЗВИТИЯ ДОБРОВОЛЬНОГО МЕДИЦИНСКОГО СТРАХОВАНИЯ И ПРОГРАММ СТРАХОВАНИЯ ЛЕКАРСТВЕННОГО ОБЕСПЕЧЕНИЯ

The purpose of the study is to determine the direction of development of the voluntary medical insurance market and pharmaceutical insurance for the population of Russia. The materials of the study were the data of the statistical reporting form of insurers (reporting of the Bank of Russia); statistical indicators and information about individual subjects of the insurance business; the register of licenses issued to insurance companies, Insurance Rules, data on the population of the Federal State Statistics Service. The method of content analysis, the method of analysis of time series, methods of analysis, synthesis and generalization of information were used. It is revealed that the voluntary medical insurance market in 2022 is characterized by the following trends: a decrease in the volume of insurance premiums, a stable number of insurance contracts, the growth of the corporate segment, a decrease in the amount of payments, a decrease in the number of insurers working in the field of health insurance, high monopolization of the market. A significant increase in the share of corporate voluntary medical insurance shows not only the unwillingness and/or inability of individuals to purchase insurance policy, but also the alertness of insurance companies to this insurance sector in times of turbulence. The top 10 (by the amount of insurance premiums) companies operating in the field of voluntary medical insurance have been identified. Drug insurance in the form of a separate program is offered by 6 companies from the top 10 offer a separate drug insurance program; all 6 companies apply a franchise, the level of which ranges from 10% to 100%; 2 companies include the provision of biologically active additives and medical products, 1 company offers the provision of specialized nutrition products. The basic tariff rates for drug insurance programs are significantly higher than those for medical care insurance.

Preferensi Risiko dan Faktor Yang Memengaruhi Keikutsertaan Asuransi Usahatani Padi (AUTP) di Kabupaten Jember

The low participation of rice farmers in Jember Regency in crop insurance (asuransi usahatani padi – AUTP) does not mean that rice farmers are risk seeking individuals. The objectives of this study are: (1) to analyze the risk preferences of rice farmers in Jember Regency; (2) analyze the factors that influence the participation of rice farmers in Jember Regency in the AUTP program. The measurement of rice farmer preferences used the multiple price list and constant relative risk averse (CRRA) method; and the analysis of the factors that influenced the participation of rice farmers in the AUTP program used logit regression analysis. The result showed that rice farmers in Jember Regency had a risk preference to avoid risk. The risk preferences of participants farmers of AUTP in Jember Regency are very risk averse; while not participants farmers of AUTP are risk neutral. The factors that influence the participation of rice farmers in Jember Regency in the AUTP program are: (1) age, (2) rice farming experience, (3) rice farming area, (4) risk preference, (5) AUTP knowledge, and (6) amount of insurance premium that can be paid. The participation of rice farmers in Jember Regency in the AUTP can be increased by increasing farmers knowledge of the scheme and benefits of agricultural insurance through counseling and mentoring.

Insurance Premium Determination Model and Innovation for Economic Recovery Due to Natural Disasters in Indonesia

Climate change that occurs causes the risk of natural disasters to continue to increase throughout the world. Economic losses are unavoidable, leading to the need for continuous innovation in post-disaster economic recovery efforts. Insurance is one of the offers in providing funding for the economic recovery that occurs. This study aimed to develop innovations and models for determining natural disaster insurance premiums with a subsidy and tax system. In addition, the developed model considers the disaster risk index in the form of the level of risk distribution, the frequency of events, and economic losses. In this study, the data used were the frequency of events and economic losses obtained from the Indonesian National Disaster Management Agency. The data used were 20 database periods from 2000 to 2019. This study used the collective risk method from the index of natural disaster risk parameters. From the results of the analysis, it was found that the level of distribution of disaster risk affected the determination of insurance premiums. The amount of insurance premiums is increasing along with the increase in the magnitude of the spread of disaster risk. In addition, if taxes and subsidies are reduced, then for high-risk areas, there will be a decrease in the burden of insurance premiums, and for low-risk areas, there will be an increase in the premium burden that must be paid. On the basis of the results of the analysis on the insurance model, it was found that the insurance premiums in each province varied. The results of this study are expected to be a reference for the government and private companies in implementing disaster insurance in Indonesia. In addition, the results of this study can be a means of developing innovations for disaster risk management that occurs.

PERSEPSI PETANI PADI TERHADAP ASURANSI USAHATANI PADI DI KECAMATAN RANCAEKEK KABUPATEN BANDUNG

Rice farming insurance program is a government program that provides income and welfare protection to farmers in the face of production risk. Drought, flooding, and attacks by plant-disturbing organisms made rice farming in Rancaekek Subdistrict, Bandung District, a threat to crop failure. The involvement of rice farming insurance program can be an effective program to protect and prosper rice farmers when there is crop failure, especially during climate-related disasters and attacks by plant destruction organisms. This study aims to analyze 1) how rice farmers in Rancaekek Subdistrict, Bandung District, express their opinions about the rice farming insurance program, 2) whether there are any differences of the perceptions between farmer groups who participated in the rice farming insurance program and those who did not. The research method utilized a survey, and the number of respondents was as many as 50 farmers using proportionate stratified random sampling. Descriptive statistical analysis and the Mann Whitneey test were used in this study. The findings show that 1) rice farmers who participated in the rice farming insurance program give a good assessment that the program is considered important and can overcome rice farming problems. This is supported by the results that farmers understand the program, the objectives and benefits of the program, and socialization activities have met the needs of farmers, the administrative process is assisted thus easier at the registration stage, file collection, and when obtaining compensation claims disbursement. Regarding the amount of insurance premiums, it is felt to be light and affordable by farmers and the cost of compensation is considered sufficient to cover the initial capital. Meanwhile, rice farmers who did not participate in the insurance program had a mixed perception, in which some farmers did not believe the benefit of the program. Some farmers were unaware of the insurance program, and as a result, they lacked a thorough understanding of the program's goals, objectives, and benefits. 2) According to the Mann Whitneey test results, there were significant differences in the perceptions between farmers who participated in the insurance program and those who did not.

THE INSURANCE MARKET OF UKRAINE UNDER THE CONDITIONS OF THE STATE OF MARTIAL

The purpose of the article is to study the peculiarities of the regulation of insurance activity in Ukraine under martial law and to determine the prospects for the development of national insurance. This article examines the theoretical aspects that define insurance markets and their structure. The dynamics of the number of insurance companies by type and the main indicators of the insurance market are presented in detail.To analyze the state of the insurance market, the amount of insurance premiums and insurance costs, the number of concluded insurance contracts, the amount of income, the share of total insurance premiums, insurance reserves and assets of insurance companies are taken into account. Factors affecting the insurance market of Ukraine are considered. The rating of the leaders of insurance companies of Ukraine by net premiums is given. A number of problems were identified that must be solved to ensure the competitive functioning of insurance markets. In order to overcome the problems of the effective functioning of the insurance market of Ukraine, the methods of improving its activity are given.At the theoretical level of research, it is possible to highlight insurance activity in Ukraine, as it is based on the norms of the Law on National Insurance, the development of which in the pre-war period took a difficult path, but provides a reliable basis for insurance even in the conditions of martial law. Furthermore, there is no doubt that, despite the martial law, there is still room for further development of insurance, especially as an investment vehicle. It looks promising to attract the investment opportunities of insurance companies to restore the nationwide network of medical and pharmaceutical institutions destroyed by the war. Reasoned opinion, the state can introduce new state securities, focusing on insurance investors, etc., the funds will be directed to the restoration of the state health care system

Determination of Farming Business Insurance Premium Prices with the Variance Premium Principle and Standard Deviation Premium Principle Methods

The agricultural sector is one of the most important economic sectors in Indonesia, however, agricultural business can also pose a risk of loss resulting in a decrease in agricultural production. This is caused by several factors such as plant pests, weeds, and rainfall. Therefore it is necessary to make an effort to reduce the risk of losses that occur, one of which is by implementing an insurance policy. The risk experienced by farmers is assumed to be a random variable that has a certain distribution. So that the calculation of this risk is related to the probability model, one of which is the aggregate loss model. Then applied the principle of variance premium, and standard deviation premium to calculate the amount of insurance premiums. The amount of premium generated for each of these principles is 2,396,277 and 2,012,839. So it can be said that with the same risk, the standard deviation premium principle produces a premium price that is more economical than the variance premium principle. So that if this principle is applied, farmers will benefit more if they insure their agricultural businesses.

The problem of risk protection in agriculture of Ukraine

An important specific feature of risk insurance in the agricultural business is the possibility of systemic risks, which are characterized by large amounts of loss-making for agricultural enterprises. In this case, the amount of insurance premiums received by insurers may significantly exceed the amount of their insurance payments. In our opinion, the insurance products offered by Ukrainian insurers in the field of agricultural insurance do not fully meet the needs of consumers. The main problems of Ukrainian insurance organizations providing services in the field of agricultural insurance are the low level of solvency of agricultural enterprises, as well as inflationary processes that make long-term agricultural insurance contracts concluded in the national currency of little demand. The evolutionary development of the Ukrainian insurance market for agricultural risk insurance, in our opinion, should correlate with the development of reinsurance of these risks. This will make it possible to balance the insurance portfolios of insurance companies and provide insurers with additional opportunities for their investment activities. The creation of a specialized national reinsurance company for reinsurance of agricultural risks, in our opinion, will improve the insurance coverage of Ukrainian agricultural enterprises.

STUDY OF THE FACTORS INTLIENCING THE WORLD INSURANCE MARKET

The article is devoted to the study of the world insurance market development, the analysis of the factors which influence an object of the research. The role of insurance markets in the economics of each country is extremely significant. In developed countries people actively use life insurance, health insurance, property insurance and financial risk insurance. Considering that a prime purpose of insurance companies is to provide public with insurance services and protection, there is a need to pay detailed attention to the development of insurance market due to the fact that every country has its unique and distinctive insurance market character. The world insurance market can be conditionally divided according to the country’s economic development criteria. In this article we have analyzed world insurance market; the main object of analysis was the amount of insurance premiums. This analysis was conducted in several directions, namely by world regions, by economic development of countries and by economic development in the world. According to the results of the analysis of insurance premiums, there was a considerable increase in the investigated index, which might state a gradual development of a regional insurance market. It was determined that this growth occurred at the expense of the developed part of the American region insurance market, it was also figured out the distribution of shares of dynamic regions and developed regions in the world insurance market. The necessity to research dominant factors, which might deteriorate world insurance market conditions, has been proved . The amount of insurance premiums as a resultant feature was analyzed in the paper. Using the regressive and correlation analysis methods for the insurance premiums data revealed a direct strong dependence of a country’s insurance market on its gross domestic product. The mathematical model under examination was tested for adequacy, significance and reliability using appropriate indicators. The factors, which analyzed in paper , were checked for statistical significance. Gross domestic product and external balance of a country turned out to be influential factors in the process of testing. The study proves that a current condition of a country’s insurance market is primarily affected by the economic development of a country.

USING A CORPORATE USEFULNESS FUNCTION TO DETERMINE AN ACCEPTABLE AMOUNT OF BUSINESS INSURANCE

The main problem in concluding business insurance contracts has the main obstacle – the coordination of the insurance premium between the corporation and the insurer. The notion of the Neumann-Morgenstern utility function was used to determine the level of interest of the corporation's employees. Based on the method developed earlier by the author to determine the utility function for corporations, a number of meetings were held with the management of the NGO "South" to determine the utility function of each group. To do this, they were offered a conditional game with the opportunity to win a large or small amount by paying some intermediate amount. At the same time, the probability of winning a large sum changed until the player became indifferent to winning or losing. The data were pooled and approximated by a transcendental model that included a power function, an exponent, and a sine wave. The search for model coefficients was performed by the method of optimization selection through the "Solution Search" function of Excel spreadsheets. The quality of the approximation was tested by Pearson's test with a confidence level of 0.8. The quality of the approximation is also confirmed by the almost complete coincidence of the graphs of the original function and the approximated one. The method of finding an acceptable amount of business insurance on the principle of greatest utility is given. To do this, the values of the probability of winning, the amounts of winnings and losses were the usefulness of this financial transaction with the use of approximation. Then, the weighted average utility was determined by the product of the probability of winning on the utility of the amount of gain with the addition of the product of the probability of loss on the utility of the amount of loss. According to the developed methodology, acceptable insurance premiums were calculated for four launches under the Sea Start program for the case when the insurance company independently determined the probability of a failed launch. It is shown that the sum insured demanded by the insurers significantly exceeded the amount that the corporation agreed to pay. The conclusions provide an additional calculation for a failed start-up and show that in the latter case it would be more profitable to abandon the insurance. It is also recommended before concluding the insurance contract to perform the proposed procedure to reduce the period of approval of the amount of insurance premiums.

The Global Relevance of the EU Single Market on Insurance After the Insurance Distribution Directive (IDD)

The amount of insurance premiums collected within the European Union places this market among the world leaders. Although insurance regulation is still partly national, the European Union's effort to introduce harmonized rules between the Member States has intensified since the financial crisis. This essay intends to highlight the global relevance assumed by the regulatory framework of the European Union. The introduced set of rules arises from the principles established internationally and, in turn, influences these principles. Thus, the EU regulatory framework on insurance is relevant to understand the potential evolution of the international standards on insurance. The analysis focuses on the rules protecting the policyholders, as this is the main objective of the insurance regulation and supervision of the European Union. Therefore, this study examines the recent Insurance Distribution Directive (IDD) salient features in light of the overall regulatory framework governing the insurance business in the European Union. In addition, the study also tests the resilience of new rules to the COVID-19 pandemic and digital transformation, which were not at the core of the IDD.

CURRENT TRENDS IN RISK MANAGEMENT OF AGRICULTURAL PRODUCTS

Introduction. Agricultural producers regularly face price and production risks. Moreover, the strengthening of global free trade and changes in domestic agricultural policy increase the likelihood of adverse events. As price volatility increases revenue volatility, manufacturers are realizing the importance of risk management as a component of their management strategies. One way to reduce these risks is to use commodity futures and other derivatives. Similar to car insurance, hedging potential costs as a result of a car accident, farmers can use commodity futures markets to hedge the potential costs associated with commodity price volatility. Just as if the profit from a car insurance claim cannot exceed the value of the total amount of insurance premiums, the profit from hedging may not cover the cost of hedging. The purpose of the article is to scientifically substantiate theoretical positions and methodological approaches and to develop alternative risk management strategies through stock exchange instruments, namely, its derivatives – futures and options. Results. The importance of theoretical bases formation of risks that can be faced by domestic producers is substantiated. The ways uncertainties occur, stages of their transformation, are explained. The theoretical approach to risk management through the use of futures contracts is systematized. The historical stages of development of using derivatives have been evaluated. Conclusions. In developed countries, any business activity is unthinkable without risks, so any manufacturer seeks to ensure its risk, including a fixed market. The very time market, on which a particular derivative operates, allows redistributing risks among market participants. The advantage of derivatives is the leverage that allows participants to operate large amounts of risk management funds, including hedging their own products. Keywords: risk, risk management, hedges, options, futures, derivatives.

ЭФФЕКТ ДОБРОВОЛЬНОГО СТРАХОВАНИЯ ЖИЛЬЯ В РЕГИОНЕ С НИЗКОЙ СТРАХОВОЙ ОБЕСПЕЧЕННОСТЬЮ

The insufficient level of insurance services development in Russia is combined with high risks of losses from emergencies. Compensation to the population for damage or loss of housing as a result of fires, natural disasters, communal accidents and other events occurs mainly at the expense of state funds from the federal and regional budgets. Using the example of the Republic of Khakassia, the article examines the dynamics of performance indicators of insurance companies with their participation in regional programs of voluntary home insurance against emergency situations. The aim of the study is to substantiate the positive economic effect of programs of voluntary insurance of housing by citizens with the participation of funds from the federal, regional budget and insurance companies in compensation for damage from emergencies. Research objectives include: analysis of the risks of emergencies in the Republic of Khakassia; regional features of the insurance market; assessment of the effectiveness of insurance companies’ participation in the voluntary house insurance program against emergency. The materials for this study were regulatory legal acts, data from state statistics, reports of federal authorities, expert assessments on this topic. An empirical research to assess the amount of insurance premiums for voluntary insurance in the Republic of Khakassia was carried out using modeling methods, to determine the number of households in the region, an extrapolation method was used, and a comparative method was used to assess the calculation results. The effect of voluntary insurance of housing against emergencies in the region was obtained in the form of an increase in indicators: the depth of insurance by 0.08 percentage points, the degree of coverage of the insurance field - by 5.27 percentage points, excess of the growth rate of insurance premiums compared to the growth rate consumer prices - by 0.4 pp.

Risk Analysis and Calculation of Insurance Premiums on Coffee Export Activities in North Sumatera Province

Coffee export activities in North Sumatera can be carried out using a variety of transaction systems. However, any transaction system has risks that may occur at any time. Risk management must be applied in coffee export activities. One common method used to manage risk is to use insurance services. This study aims to identify the type of transaction system that used by coffee exporters in North Sumatera Province, then analyze the risks that can occur in coffee export activities in this province and analyze the amount of insurance premiums on coffee export activities there. The location of the study was intentionally determined, namely in the North Sumatera Province. The research sample was 30 active exporters registered with the Indonesian Coffee Exporters Association of the North Sumatera Regional Board, determined by census. Primary data collected using a questionnaire and secondary data obtained from documentation. Transaction system identified using descriptive methods, while risk analysis is by calculating the risk score value. As for calculating the amount of insurance premiums carried out using Black-Scholes. The results found that there were three transaction systems that were used by research respondents in exporting coffee, namely letters of credit, advance payments and open accounts. Open Account is used by all respondents. While the export risk which is a priority risk in this research is at the risk of production. The average value of insurance premiums obtained using the Black-Scholes method is 7.82 percent of the total coverage.

Insurancе of business’ risks

The paper emphasizes the role of entrepreneurial risk insurance in economic protection and the stable development of the activities of Ukrainian entrepreneurs. The features of the interaction of insurance and entrepreneurship in Ukraine are considered. The list of business risk insurance objects is given. The paper highlights the types of entrepreneurial risks that may be insured. The main features of insurance of entrepreneurial risks in modern business conditions are investigated. It has been determined that insurance of entrepreneurial risks is one of the most effective ways of influencing financial relations on the business process during the development and implementation of management decisions. The system of insurance services offered today in the domestic insurance market helps to reduce the negative consequences of insured events, and provides protection against losses in the process of doing business. Attention is drawn to foreign experience in providing insurance services depending on the specifics of entrepreneurial activity. Limitations for active demand for insurance services for insurance of entrepreneurial risks are considered, the main of which are the high cost and imperfection of the terms of the contract. The structure of gross and net premiums by type of insurance in the insurance market of Ukraine for the period 2017-2018 is analyzed. Conclusions are made about the low specific weight of the studied insurance services in the total amount of insurance premiums and unsatisfactory dynamics. The main problem points are highlighted, which are an obstacle to the successful development of the studied segment of the Ukrainian insurance market. It was recommended to insurance companies to expand offers for entrepreneurs, taking into account the specifics of professional activity. To develop and support the interaction of insurance and business in Ukraine, it is necessary to improve the legislative framework for this type of activity.

An Empirical Study on the Effects of Social Endowment Insurance Reform in China

In recent years, China, the world’s largest population country, has also become an aging society. Social endowment insurance is not only a major source of income after retirement but also plays a major role in social stability. In 2005, large-scale social endowment insurance reform was conducted in China. Through this reform, the social endowment insurance became unifed and normalized, and the participation of the social endowment insurance was obligated for an employee. In addition, the government has issued various welfare policies so that the unemployed, free job and rural residents can join social endowment insurance. Then, this paper analyzes the effect of the reform of China social endowment insurance on the amount of Insurance premium of social endowment insurance and the distribution of family expenditure by using the DID model and the fxed effect model.

Factors influencing willingness and ability to pay for social health insurance in Nigeria.

BackgroundMany low and middle-income countries are increasingly cognisant of the need to offer financial protection to its citizens through pre-payment schemes in order to curb high out of pocket expenditure and catastrophic spending on healthcare. However, there is limited rigorous contextual evidence to make decisions regarding optimal design of such schemes. This study assesses the willingness-to-pay (WTP) for the recently introduced state contributory health insurance scheme (SHIS) in Nigeria.MethodsThe study took place in 6 local government areas in Kaduna state, North-west Nigeria. Data were collected from a household survey using a three-stage cluster sampling approach, with each household having the same probability of being selected. Interviews were conducted with 4000 individuals in 1020 households. Contingent valuation was used to elicit the willing to pay (WTP) for the household using the bidding game technique. The relationship between socioeconomic status and WTP was also examined using logistic regression models.FindingsAbout 82% of the household heads were willing to pay insurance premiums for their households, which came to an average of 513 Naira (1.68 USD) per month per person. The average amount individuals were willing to pay was lower in rural areas (611 Naira) compared to urban areas (463 Naira). These results were influenced by household size, level of education, occupation and household income. In addition, only 65% of the households had the ability to pay the average premium.ConclusionSocioeconomic factors influence individuals’ WTP for contributory health insurance schemes. It is important to create awareness about the benefits of the insurance scheme, especially in rural areas, and in both the formal and informal sectors in Nigeria. WTP information can inform the amount of insurance premiums. However, it is important to consider differences between the WTP and the cost of benefits package to be offered, as the premium amount may need to be subsidized with public financing.

Comparative Analysis of Insurance Pemiums in Serbia and Bosnia and Herzegovina - Multiple Linear Regression Analysis Model

In the last few years, the global insurance market has shown a trend of concentration growth, which was conditioned by the processes of mergers and acquisitions in insurance. The aim of this paper is to make a comparative analysis of insurance premiums in Serbia and Bosnia and Herzegovina. Dynamic analysis of market concentration indicators calculated on the basis of absolute amounts of premiums indicates that the insurance market in Bosnia and Herzegovina is characterized by low concentrated supply, i.e. there is greater equality of market share in relation to high inequality and high concentration among market participants in the insurance sector of the Republic of Serbia. Having applied the multi-linear regression model in order to analyze the impact of selected macroeconomic indicators on the amount of insurance premiums in the period 2000-2017, it can be concluded that the greatest impact on the amount of the premium in Bosnia and Herzegovina had Gross Domestic Income and Wage and Salaries Workers. In the Republic of Serbia, the greatest influence on the amount of premium in the observed period had the Average Net Salary, Households and Final Consumption Expenditure and Gross Domestic Income.

DEVELOPMENT POTENTIAL OF REGIONAL PARAMETRIC INSURANCE PROGRAMS IN RUSSIA

The subject of the research is the study of Russian and international experience in the use of index insurance. It is revealed that parametric insurance is used both in developed and developing insurance markets. The aim of the study is to propose an index insurance model based on two parameters: temperature and precipitation — with the possibility of using this model for regional index insurance programs inRussia. The authors put forward a hypothesis that the model of index insurance of crops against drought can be based on two parameters for a more accurate determination of the amount of insurance premiums. The study is built on the basis of statistical data from 85 subjects of theRussian Federationon precipitation, temperature, yields for the period from 1996 to 2015. We used the method of correlation analysis to select the region for the model. To test the model, one region was chosen —Bryanskregion, where the greatest correlation between the parameters was found. The study proved the economic feasibility of index insurance model based on one subject of theRussian Federationin comparison with the insurance program with state support. It is proved that the calculation of the model with two parameters has a lower level of risk than the calculation of the model with one parameter. It makes possible reduction of the net premium rate and competition with insurers programs drawn up with the support of the state. The authors highlight the existing problems of insurance with state support and identified the need to create regional insurance programs for various crops to protect against catastrophic risks, such as drought, frost, floods and others on the basis of meteorological data. We conclude that the proposed model makes possible to expand the insurance of farmers’ risks, creation of several programs with different sets of insurance risks, and reduction of the risk of fraud by more accurate calculation of the insurance premium.