The Role of Insurance in Risk Management and Investment Promotion of Modern Agribusinesses (The Case of Greenhouse Cultivation in Tehran Province)

Insurance has always been an efficient tool in facilitating production and increasing investment through the world. Meanwhile, lack of investment has been a constant problem in the agricultural sector, as one of the most vulnerable economic sectors. Hence, insurance, as an effective tool for securing the return on investment, is likely to solve this problem. The current research is aimed at identifying and analyzing the role of insurance in risk management of modern agribusinesses. In order to fulfil the research objective, a mixed method research was designed and qualitative and quantitative tools were developed. In the qualitative part, the research population includes the experts of agriculture and investment in new businesses, while the population of the quantitative part is composed of greenhouse owners in Tehran province. 9 interviews were carried out in the qualitative part and data were analyzed through open and axial coding. In addition, 137 questionnaires were investigated in the quantitative part. Quantitative data were analyzed by structural equation modelling method. The results demonstrate that various types of risk, including production, market, and environmental risks have a negative effect on the insurance rate, In other words, insurance coverage decreases when risk increases, which is a rational result. Moreover, insurance has a positive effect on investment promotion and can offset the negative effect of risk and lead to an increase in investment and hence, establishment of new businesses in this field.