Research On The Rate-making Of Crop Area Yield Insurance Based On Risk Zonation

Since Henan province carried out the pilot policy-oriented agricultural insurance in 2007, the coverage of agricultural insurance has been extended to the whole province, with the types of insurance increasing and risk management ability strengthening. But the rate of agricultural insurance is fixed and uniform in the whole province and the security level is low, which cannot reflect fully the risk levels of different parts of Henan province, causing serious moral hazard and adverse selection,which causes long-term shortage of the effective demand and effective supply of agricultural insurance in our province. In view of the problem of unreasonable agricultural insurance rate in our province, combined with the economic development situation and the development of agricultural insurance in our province, on the basis of foreign agricultural insurance experience, developing crop area yield insurance is an effective way to solve the agricultural insurance development problem in our province.Scientific and reasonable risk zoning and insurance rate setting is the premise of developing crop area yield insurance. Both the division of risk areas and premium rate is based on estimating the probability of yield loss rate, which is replaced by yield reduction rate because of the complexity of the risk factors and disaster losses and the lack of historical data. Due to the stability of the loss probability distribution is the foundation of risk zoning and rate setting, under the small sample size using nonparametric information diffusion model can get relatively stable estimation, which is the combination of the nonparametric kernel density estimation and the fuzzy mathematics method.In order to reflect fully the comprehensive risk level of wheat production around the cities of Henan province, yield variation coefficient, the probability of yield reduction rate being more than a certain threshold, specialization index and efficiency index are selected as four types of risk indicators of risk zoning. And divide our province into high, medium and low risk level area by applying the method of systemclustering, and then apply the nonparametric information diffusion model to set respectively premium rate for the three areas while the security level is 95% and100%.The research shows that the pure premium rate of wheat insurance is 3.46%under the security level of 100% in the high-risk area of Henan province, which is lower than the current wheat premium rate in our province, and the medium and low risk area is respectively 1.89% and 1.17%. So the difference of the risk level in different risk areas is visible in our province, and the higher uniform premium rate can lead to more serious moral hazard and adverse selection, which is the root cause of the shortage of effective demand and effective supply. Therefore, developing crop area yield insurance is a good choice to realize great-leap-forward development of agricultural insurance in our province.