Private Crop Insurers and the Reinsurance Fund Allocation Decision
AbstractThis research investigates the strategic behavior of private crop insurance firms reinsured by the USDA through the Standard Reinsurance Agreement. This arrangement allows the private firm to strategically allocate individual policies into different risk sharing arrangements. Thus, firm earnings are conditioned upon accurately forecasting policy loss experience. Our analysis begins with models investigating the characteristics explaining the placement of policies into the assigned risk fund. Then a simulation model of the SRA is used to compare the post-SRA returns of actual firm allocations to two alternative allocation strategies based on aggregate models and a policy-level econometric forecasting model.
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Bibliographic InfoPaper provided by EconWPA in its series Risk and Insurance with number 0506003.
Length: 32 pages
Date of creation: 08 Jun 2005
Date of revision:
Note: Type of Document - pdf; pages: 32
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Risk; insurance; reinsurance; logit; policy;
Other versions of this item:
- Keith H. Coble & Robert Dismukes & Joseph W. Glauber, 2007. "Private Crop Insurers and the Reinsurance Fund Allocation Decision," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 582-595.
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2005-06-14 (Agricultural Economics)
- NEP-ALL-2005-06-14 (All new papers)
- NEP-CMP-2005-06-14 (Computational Economics)
- NEP-IAS-2005-06-14 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jerry R. Skees & J. Roy Black & Barry J. Barnett, 1997. "Designing and Rating an Area Yield Crop Insurance Contract," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 430-438.
- Mason, Chuck & Hayes, Dermot J. & Lence, Sergio H., 2003. "Systemic Risk in U.S. Crop Reinsurance Programs," Staff General Research Papers 1944, Iowa State University, Department of Economics.
- Mario J. Miranda & Joseph W. Glauber, 1997. "Systemic Risk, Reinsurance, and the Failure of Crop Insurance Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 206-215.
- Joseph W. Glauber, 2004. "Crop Insurance Reconsidered," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1179-1195.
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