Corn Insurance + Future Product Design

With the advance of domestic corn acquisition from the previous temporary storage price to the market-oriented price reform,corn growers will face a huge risk of price decline.Although the agricultural product price insurance system has been established in our country,due to the lack of risk transfer channels and means of the traditional agricultural product price insurance,the development of agricultural product price insurance is relatively slow,which restricts the development of agricultural product price insurance market in China to a certain extent,and also hinders the reform of agricultural product price marketization in our country.In order to facilitate agricultural enterprises and small farmers to avoid the market risk of agricultural products price,ensure the actual income of growers,enhance the enthusiasm of growers,maintain national food security and promote the market-oriented reform of agricultural product purchase price,since 2016,the Chinese government has actively guided the operation mode of "insurance futures" of agricultural products.Based on the analysis of the present situation of corn market in China,combined with the operation mode and characteristics of "insurance futures",this paper designs a product of corn "insurance futures" by using the pricing method of Asian options in modern financial engineering,probes into the returns and risks of corn "insurance futures" products,and carries on the sensitivity test and situational analysis.In this product,the insurance company transfers the risk to the futures company through the Asian option,and the futures company further transfers the risk to the futures market,and constructs the connection between the corn producer and the futures market.The purpose of this paper is to manage the market risk of corn price by corn production enterprises and farmers,which is beneficial to stabilize farmers' income and further promote the marketization of corn purchase price.For insurance companies,corn "insurance futures" products can expand the business scope of the company,enrich the range of insurance products.As far as the futures market is concerned,it is beneficial to perfect the futures market of our country.