Where is your Crop Insurance Agent? Understanding the Geographical Distribution of Agents

Cory Walters and Nathan Delay

No 413207, Cornhusker Economics from University of Nebraska-Lincoln, Department of Agricultural Economics

Abstract: Following the modifications to the Standard Reinsurance Agreement (SRA) in 2010, there was limited understanding of the impact of policy changes on agent availability. Our objective is to construct a model of the equilibrium supply of crop insurance agents and to test hypotheses regarding the factors influencing agent concentration, such as commissions, competition, and risk. We developed a theoretical equilibrium model of the federal crop insurance market, which encompasses three tiers: insurance companies, agents, and farmers. The model incorporates key features of the federal program, including government-set premiums and the stipulation that agents cannot refuse coverage or modify premiums for farmers within their jurisdiction. Agents derive their income from commissions, which are a percentage of the premiums on the policies they sell. The model consists of: farmer demand, insurance company behavior, and agent entry and equilibrium.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nbaece:413207

DOI: 10.22004/ag.econ.413207

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