A private management strategy for the crop yield insurer: a theoretical approach and tests

Martial Phélippé-Guinvarc'H () and Jean Cordier

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Abstract: The agricultural economic literature shows the difficulties of managing insurance contracts that include systemic risk. The aim of this paper is to present an approach for overcoming such difficulties. The approach is applied to a crop yield insurance contract but can be extended to other insurance contracts such as revenue or crop margin ones. The recommended strategy pools risk as common to insurance contracts. Additionally, the strategy transfers the pooled risk to financial markets in order to manage the systemic risks component. The financial market model includes a crop yield futures contract, a price futures contract and a zero-coupon bond. This strategy allows for a risk-free intermediation in insurance contracts with a high systemic risk component.

Keywords: insurance; crop insurance; assurance; risque; assurance récolte; contrat d'assurance; risque agricole (search for similar items in EconPapers)
Date: 2006
Note: View the original document on HAL open archive server: https://hal.science/hal-02151824v1
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Citations: View citations in EconPapers (5)

Published in Insurance: Mathematics and Economics, 2006, 39 (1), pp.35-46. ⟨10.1016/j.insmatheco.2006.01.003⟩

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Journal Article: A private management strategy for the crop yield insurer: A theoretical approach and tests (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02151824

DOI: 10.1016/j.insmatheco.2006.01.003

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