Research On "Insurance+Futures" Model Pricing Of Agricultural Products From The Perspective Of Price Fluctuation

As a large agricultural country,the development of agriculture determines the economic development of China and plays a key role in supporting the economic prosperity of China.Stable prices of agricultural products are an important prerequisite for the security of China’s food supply and the sustainable and healthy development of the social economy,but the prices of agricultural products in China are always accompanied by natural and market risks that are difficult to eliminate,and it is becoming more and more common for the prices of agricultural products to be affected by external events that lead to abnormal fluctuations,such as the financial crisis in 2008,the drought in southwest China in 2010,the trade friction between China and the United States in 2018,the In 2019,corn options were listed,and in 2020,the new crown pneumonia epidemic,etc.,so that China’s agricultural prices fluctuate significantly or even skyrocket.This kind of price fluctuation risk to China’s agricultural development,food supply security and economic prosperity has brought a huge test.In the new situation,how to effectively control the risk of price fluctuations of agricultural products is crucial to the development of China’s agriculture and national economy.Until 2022,the "No.1 Document" of the Central Government has mentioned the "insurance+futures" business model for six consecutive years.After years of piloting and perfecting,the "insurance+futures" model has achieved certain results and provided a new path for the development of China’s agriculture,becoming one of the main ways to manage the risk of price fluctuations of agricultural products in China.Therefore,how to improve the "insurance+futures" model and develop a reasonable agricultural price index insurance to cope with the uncertainty of agricultural price fluctuations is an urgent problem to be solved.Based on the shortcomings of the existing domestic agricultural futures insurance operation model,this paper optimizes the "insurance+futures" model and pricing strategy of agricultural products in China by drawing on foreign experience in the development of agricultural price index insurance and the combination of insurance and futures to help agriculture.Firstly,in terms of model optimization,the actual settlement price at the time of insurance maturity is determined by combining the futures market and the spot market,while the insurance company retains part of the risk by means of overpayment reinsurance,so that the insurance company can better play its own risk management role.Secondly,in terms of pricing optimization,the impact interval of external events on the price fluctuation of agricultural products is divided from both time and space.Based on the price discovery function of futures market and spot market,the contribution ratio of futures and spot market to the price discovery function is determined by using the common factor model,and the contribution ratio is used as the weight to integrate the prices of futures market and spot market,and the integrated price is taken as the The combined price is used as the actual settlement price at the time of insurance expiration.Finally,the B-S option pricing model is used to price the original premiums of price index insurance and reinsurance premiums of insurance companies in different periods and regions subject to exogenous shocks of the event.Taking the impact of the new crown pneumonia epidemic on China’s corn price volatility as an example,the impact of the epidemic was divided into three time periods(before the outbreak,at the outbreak,and after the epidemic stabilized)and eight major corn producing regions based on the perspective of spatial and temporal heterogeneity.The optimized model and pricing method were applied,and the comparative analysis in time and space led to the conclusion that firstly,the"insurance+futures" pricing result designed in this paper can cope with the risk of corn price fluctuation caused by the epidemic impact,and effectively reduce the premiums,so that farmers can enjoy the pre-epidemic premiums after the epidemic outbreak,and the insurance companies can also The insurance company is also better able to protect against the risk of price fluctuations caused by the epidemic.Secondly,the premiums of maize price index insurance vary significantly by region,so providing maize "insurance+futures" scheme to farmers or enterprises by region can fully protect them from price fluctuation risks.Finally,the optimized insurance premiums calculated by the adjusted prices in the futures and spot markets are more scientific and reasonable,which solves the problem of small profit margin and low participation of insurance companies to a certain extent,and further increases the enthusiasm of insurance companies and farmers to participate in the"insurance+futures" model.In the future,it can be applied to other cases of abnormal price fluctuations caused by external events or natural disasters.At the same time,with the increase of the types of agricultural products in the "insurance+futures"pilot program,the corn price index insurance designed in this paper can be applied to other types of agricultural products in the future to improve the protection varieties.