Study Design Yunnan Rice Yield Insurance

Agriculture is a basic industry which ensures popular support and social stabilityin a country or region. The security of “rice” and “vegetable”, one of the nationalimportant strategies, has attracted more and more concerns and met increasinglysevere challenges，like the cultivated land is decreasing. In2004, the central No.1fileproposed for the first time “building up policy-guided agricultural insurance and pilotproject in some areas and products”. After that, the central No.1files stated thesupport of agricultural insurance for “issues of agriculture, farmer and rural area” foreleven consecutive years. However, the insured amount of crop insurance is mainlymaterialization guarantee cost and suffers from weak guarantee extent. In2007,Yunnan introduced the policy-guided agricultural insurance pilots and ensuresstability in high growth rate in scale for seven consecutive years. At the same time,there arise a series of problems. In particular, due to droughts for several years, theoperational efficiency of its policy-guided agricultural insurance is rather backwardand the insurance function of loss compensation and risk management fails.Compared with current agricultural insurance product of materializationguarantee cost, area yield insurance lowers moral risk and adverse selection, andenjoys low management cost, standardized products and simple procedure. For thesereasons, taking the example of crop in Yunnan province, this thesis studies the designproposal for rice yield insurance in Yunnan province.The research content and conclusions of this thesis:Firstly, the thesis analyzes the main meteorological disasters for rice growth inYunnan province and the distribution of drought, hail, flood and debris flow in thestates and cities of Yunnan from a space-time perspective.Secondly, this thesis analyzes the insurance operation for Yunnan rice growthincluding the main content of insurance terms, operation mode and operation of theinsurance company for rice insurance in2013, thereby finding out the difficulties inrice insurance development.Thirdly, in view of the problems and plights in current rice growth insuranceoperation, this thesis designs the product plan with Yunnan rice yield insurance as asolution including the overall idea of product design, the idea of product solutions, feasibility analysis of the product and principal technological difficulties for thedesign.Fourthly, selecting variable coefficient of per unit area yield of rice,professionalization index for rice growth, rice growth efficiency, the probability ofrice failure above5%per unit area yield and rice disaster index as the index forevaluating rice production risk and using SPSS software for hierarchical clusteranalysis of the sample indices, the rice production risks in16states and cities inYunnan are classified into five risk levels: Areas with highest risk: Xishuangbanna;Areas with relatively high risks: Kunming, Yunxi, Lijiang, Zhaotong, Wenshan andQujing; Areas with medium risks: Pu’er, Dali, Chuxiong, Honghe, and Baoshan;Areas with relatively low risks: Lincang, Nujiang, and Diqing; Areas with lowest risk:Dehong.Fifthly, Chi-Squared test, K-S test and AD test are in use for making the optimaldistribution of volatility model of rice per unit area yield in states and cities in Yunnanprovince. The thesis stipulates the guarantee level is80%, calculating the purepremium rate of rice yield insurance in every state and adjusting it in the adjoiningcorrelation method and calculating additional premium rate in the empirical method.Finally, the total sum of two kinds of premium rate is the rice yield insurancepremium rate.Ultimately, this thesis discusses the establishment of government andcommercial insurance agency coordination mode for catastrophe risk diversificationmechanism, the average catastrophe risk preparation amount is220million yuan andloss ratio in140%~200%of loss reinsurance premium rate is9.52%, the part of morethan200%can propose the utilization of financial innovations under safety.