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Agricultural Risk Transfer: From Insurance to Reinsurance to Capital Markets




Agricultural Risk Transfer: From Insurance to Reinsurance to Capital Markets

Roman Marco Hohl

ISBN: 978-1-119-34563-3 February 2019 440 Pages



Gain a holistic view of agricultural (re)insurance and capital market risk transfer

Increasing agricultural production and food security remain key challenges for mankind. In order to meet global food demand, the Food and Agriculture Organisation estimates that production has to increase by 50% by 2050 and requires large investments. Agricultural insurance and financial instruments have been an integral part to advancing productivity and are becoming more important in increasingly globalized and specialized agricultural supply chains in the wake of potentially more frequent and severe natural disasters in today’s key producing markets.

Underwriting, pricing and transferring agricultural risks is complex and requires a solid understanding of the production system, exposure, perils and the most suitable products, which vastly differ among developed and developing markets. In the last decade, new insurance schemes in emerging agricultural markets have greatly contributed to the large growth of the industry from a premium volume of US$10.1 billion (2006) to US$30.7 billion (2017). This growth is bound to continue as insurance penetration and exposure increase and new schemes are being developed. Agricultural (re)insurance has become a cornerstone of sovereign disaster risk financing frameworks.

Agricultural Risk Transfer introduces the main concepts of agricultural (re)insurance and capital market risk transfer that are discussed through industry case studies. It also discusses best industry practices for all main insurance products for crop, livestock, aquaculture and forestry risks including risk assessment, underwriting, pricing, modelling and loss adjustment.

  • Describes agricultural production risks and risk management approaches
  • Covers risk transfer of production and financial risks through insurance and financial instruments
  • Introduces modelling concepts for the main perils and key data sources that support risk transfer through indemnity- and index-based products
  • Describes risk pricing and underwriting approaches for crop, livestock, aquaculture and forestry exposure in developed and developing agricultural systems
  • Become familiar with risk transfer concepts to reinsurance and capital markets
  • Get to know the current market landscape and main risk transfer products for individual producers, agribusinesses and governments through theory and comprehensive industry case studies

Through Agricultural Risk Transfer, you’ll gain a holistic view of agricultural (re)insurance and capital market solutions which will support better underwriting, more structured product development and improved risk transfer. 

Foreword ix

Introduction xi

Acknowledgements xiii

Special Thanks xv

CHAPTER 1 Agricultural Markets and Risk Management 1

CHAPTER 2 Concepts of Insurance 21

CHAPTER 3 Agricultural Perils and Risk Modelling Concepts 45

CHAPTER 4 Agricultural Data and Proxies 103

CHAPTER 5 Agricultural Insurance 149

CHAPTER 6 Crop Insurance 189

CHAPTER 7 Livestock Insurance 271

CHAPTER 8 Aquaculture Insurance 311

CHAPTER 9 Forest Insurance 333

CHAPTER 10 Risk Transfer to Reinsurance Markets 363

CHAPTER 11 Risk Transfer to Capital Markets 393