Study On Crop GRP Rate Based On Different Risk Level

Agricultural insurance is an effective mechanism to transfer agricultural risks and losses. However, crop area yield insurance that is as an innovation of agricultural insurance contract, it can not only reduce moral hazard, and mitigate the inverse selection and systematic risks, but also greatly reduce insuer's transaction cost, compared to individual yield insurance, it's easier to collect yield data. What's more, crop area yield insurance has advantages on loss determination and claims settlement. This article researches risk zoning and rate making of crop area yield insurance, taking Hubei's county-level semilate rice for example.The main content and concludes as follows:Firstly, this article analyses crop production risk, based on theoretical research of crop insurance risk zoning, so as to find out 12 risk indicators. Then, apply SPSS software to do the factor analysis and clustering analysis for 82 of the county town in Hubei province, according to production capacity factor, geography and climate factor, flood factor, drought and yield variation factor, we will bracket the same or similar risk area together, there are four risk rating areas. We get a result that is, risk level 1 area includes 32 cities, risk level 2 area contains 16 cities, risk level 3 area contains 18 counties, and risk level 4 area includes 16 counties.Secondly, we analyse statistical description of de-trend yields of semilate rice in Hubei province, then find that 68 areas yield distributions show negative skewness,14 areas yield distributions present positive skewness. Then we use Matlab7.0 and Eviews5.1 to estimate all parameters of each yield distribution model, so as to get all of yield distribution functions, according to comparing with yield histogram and distributions' PDF curve, empirical data CDF curve and distributions'curve, considering the results of Anderson-Darling test, we know that,42 areas obey Weibull distribution,20 areas obey Logistic distribution,8 areas obey Normal distribution,8 areas obey Beta distribution,2 areas obey Gamma distribution,2 areas obey LogNormal distribution.Thirdly, we calculate semilate rice area yield insurance premium rate of 82 countries in Hubei province, on the basis of optimal yield distribution, pure rate making formula, and adjadjacent countries'information. This part comes out, average pure rate is 3.28% in risk level 1 area, average pure rate is 5.95% in risk level 2 area, risk level 3 area is 6.91%, risk level 4 area is 7.99%, Hubei province average rate is 6.03%, and there is R4> R3> R2> R1, that is to say, the higher the risk, the rate bigger, the lower the risk, the rate smaller, on the whole.Finally, we discuss, if we make the semilate rice insurance pure rate in denomination of county, we will use our results of rate-making, and if we regard the risk region as the unit to make rate, we will perform a basic rate in the same risk area, then parts of countries in the same risk area could adjust rate according to particular conditions.