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Assessment Of The Risk Management Potential Of A Rainfall Based Insurance Index And Rainfall Options In Andhra Pradesh, India

Author

Listed:
  • Veeramani, Venkat N.
  • Maynard, Leigh J.
  • Skees, Jerry R.

Abstract

Crop insurance is an alternative risk management technique available to farmers for stabilizing their revenue risk and schemes based on area yield have been in operation for quite some time. Here rainfall based insurance indices and options are suggested as a replacement for the expensive area yield programs. Instead of direct premium subsidies which are distorting, premium subsidy is taken as a function of adverse deviation of rainfall from the mean. A sensitivity analysis at different revenue elasticity levels with respect to rainfall was performed. Potential for private insurer's and reinsurer's participation exists with rainfall based index and options.

Suggested Citation

  • Veeramani, Venkat N. & Maynard, Leigh J. & Skees, Jerry R., 2003. "Assessment Of The Risk Management Potential Of A Rainfall Based Insurance Index And Rainfall Options In Andhra Pradesh, India," 2003 Annual meeting, July 27-30, Montreal, Canada 22183, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22183
    DOI: 10.22004/ag.econ.22183
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    Cited by:

    1. Vasco Molini & Michiel Keyzer & Bart van den Boom & Wouter Zant & Nicholas Nsowah-Nuamah, 2010. "Safety Nets and Index-Based Insurance: Historical Assessment and Semiparametric Simulation for Northern Ghana," Economic Development and Cultural Change, University of Chicago Press, vol. 58(4), pages 671-712, July.
    2. Daron, Joseph D. & Stainforth, David A., 2014. "Assessing pricing assumptions for weather index insurance in a changing climate," LSE Research Online Documents on Economics 59154, London School of Economics and Political Science, LSE Library.
    3. Molini, Vasco & Keyzer, Michiel A. & van den Boom, Bart & Zant, Wouter, 2007. "Creating safety nets through semi-parametric index-based insurance: A simulation for Northern Ghana," 101st Seminar, July 5-6, 2007, Berlin Germany 9263, European Association of Agricultural Economists.
    4. Hao, Jianqiang & Bathke, Arne & Skees, Jerry R., 2005. "Modeling the Tail Distribution and Ratemaking: An Application of Extreme Value Theory," 2005 Annual meeting, July 24-27, Providence, RI 19190, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

    More about this item

    Keywords

    Risk and Uncertainty;

    Statistics

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