A Business Model Study Of “Insurance Plus Futures” In A Futures Company

Issues concerning of agriculture,farmers and rural areas are related to maintaining prolonged stability of China.With the context of presuming supply-side structural reform in agriculture,it's of great significance to ensure food safety and benefits of rural residents by virtue of the agricultural risks management.In recent years,some futures exchanges,represented by Dalian Commodity Exchange,are exploring new modes of the futures market serving the substantial economy,and new methods of serving agriculture,farmers and rural areas.“Insurance Plus Futures” model is an important measure to improve the agricultural risk management system and is of significance to the development of agriculture and the stability of rural residents' incomes.Since the practice of the “Insurance Plus Futures” model in 2015,by the end of 2017,the three major futures exchanges have carried out nearly 100 pilot projects-more than half of them implemented in state-level poverty counties.There are five futures varieties involved,including soybeans,corn,cotton,white sugar and rubber.More than 30 futures companies have taken efforts to help farmers to avoid effectively the risks of fluctuating farm prices and achieves the goal of poverty alleviation.Futures companies are the key player in “Insurance Plus Futures” model,but priority is not given to them in the current business model.Therefore,it is imperative to come up with the way of the future by analyzing the model and learning lessons.Based on the study of “Insurance Plus Futures” business model at home and abroad,the paper discusses the positioning and role of all participants.And then the business of futures companies is designed with OTC options as its core.In addition,the paper analyzes the operation and problems of “Insurance Plus Futures” model,and proposes corresponding measures.The result indicates that futures companies embrace key position and the core of “Insurance Plus Futures” business rests on the design of OTC option and the hedging of on-the-floor futures.In the process of the project,it is necessary to take security measures on talents,technology and funds.Also,futures companies should do a good job in service pattern innovation,service quality improvement,further cooperation with insurance companies and market capacity to conduct “Insurance Plus Futures” business preferably.