Research On The Operation Mechanism And Pricing Of The Pig Price Index Insurance Under The "Insurance + Futures" Model

Agriculture is the "ballast stone" of China’s economy and society,and pigs are the most valuable agricultural product in the country.In recent years,factors such as geopolitical conflicts,epidemics,and diseases have led to significant fluctuations in pig prices,seriously affecting the financial stability of pig farmers and the stability of the pig industry chain.Therefore,there is an urgent need to introduce risk management tools that are more in line with market conditions and demand.The listing of pig futures provides the possibility for the development of the "insurance +futures" model for pigs,but due to the short listing time of pig futures,the types of insurance products available to farmers are not diverse enough and need to be further improved and optimized.This article initially defines the concept of price risk in the pig market and conducts a demand analysis from four aspects: production capacity,pig cycle,farming entities,and existing insurance products.It is believed that there is a significant market demand for pig price insurance.From the perspectives of relevant policy support,operational market foundation,data support,and the advantages of the "insurance +futures" model,it is argued that the wide promotion of this insurance is feasible.In the theoretical research part,the operation mechanism and operation mode of the "insurance + futures" model for pigs are analyzed in combination with relevant theories of pig price insurance and "insurance + futures." In the empirical research part,the validity of the pig futures market is verified through the pilot scheme of the Guangzhou pig futures price index insurance,indicating that the pig futures market has a price discovery function.By setting different target prices and using Monte Carlo simulation to price Asian options,the diversified design of pig "insurance +futures" products is achieved,which can better meet the risk management needs of farming entities with different levels of risk.By comparing insurance rates based on spot prices and futures prices,it is believed that pricing based on futures prices is more in line with market conditions and can better control basis risk.Based on the above conclusions,targeted suggestions were proposed for government agencies,insurance companies,and grassroots organizations.