Scientia Agricultura Sinica ›› 2021, Vol. 54 ›› Issue (22): 4778-4786.doi: 10.3864/j.issn.0578-1752.2021.22.006

• TILLAGE & CULTIVATION·PHYSIOLOGY & BIOCHEMISTRY·AGRICULTURE INFORMATION TECHNOLOGY • Previous Articles     Next Articles

The Uncertainty of Agricultural Yield Risk Assessment and Agricultural Insurance Pricing: Literature Review and Wayforward

ZHANG Qiao1,2(),WANG Ke1,3()   

  1. 1Agricultural Information Institute, Chinese Academy of Agricultural Sciences, Beijing 100081
    2China Institute for Actuarial Science of Central University of Finance and Economics, Beijing 102206
    3China Agriculture Reinsurance Corporation, Beijing 100083
  • Received:2021-01-18 Accepted:2021-04-27 Online:2021-11-16 Published:2021-11-19
  • Contact: Ke WANG E-mail:zhangqiao@caas.cn;wangke@China-agrore.com

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Abstract:

As the importance of making an accurate rate to the sustainable development of agricultural insurance programs, lots of literature on agricultural risk assessment and agricultural insurance pricing had been conducted since the 1980s. Yet, uncertainty still existed regarding the risk assessment results and/or the agricultural insurance premium. With the purpose of improving the credibility of Chinese agricultural insurance pricing, we firstly conduct a literature review on the recent development in the field of agricultural risk assessment and insurance pricing, and then put forward the uncertainty sources for agricultural insurance pricing, followed by a solution. It is found that the data scarcity, the fuzziness in dealing with technical issues, and the unmatched spatial scale of risk assessment and pricing are the three reasons for the uncertainty of agricultural risk assessment and insurance pricing, and improving the agricultural insurance pricing credibility has been emerging as a hot topic in recent literature. Reducing the uncertainty of agricultural insurance pricing can be achieved in the big data era with the help of data mixing technology and data-intensive research. While making a sound agricultural insurance rate cannot overcome the essential adverse selection problem which could hamper the agricultural insurance sustainable development, however, it can be partly addressed by providing more flexible agricultural insurance products with alternative coverage levels.

Key words: agricultural insurance, agricultural yield risk assessment, agricultural insurance pricing, insurance ratemaking, uncertainty

Fig. 1

The general process of agricultural risk assessment and insurance pricing"

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