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Full-Text Articles in Insurance

Index-Based Insurance And Risk Management Among Nomadic Mongolian Herders , Kelsey Larson Dec 2014

Index-Based Insurance And Risk Management Among Nomadic Mongolian Herders , Kelsey Larson

Independent Study Project (ISP) Collection

Mongolian herders must contend with the risk of dzuds, harsh winters that can kill large numbers of livestock. To do so, they use a mixture of formal financial tools and traditional risk mitigation techniques. This paper is a study of the interaction between the Mongolian Index-based Livestock Insurance Program and traditional informal risk mitigation techniques. The researcher interviews herders in Bulgan soum, Arhangai aimag and Galuut soum, Bayanhongor aimag to compare the IBLI program’s impact in a community that has had IBLI since 2006 and one that only received IBLI in 2012. This study finds that insurance purchase is ...


Is Government Involvement Really Necessary: Implications For Systemic Risk And Crop Reinsurance Contracts, Xiaoguang Feng, Dermot J. Hayes Oct 2014

Is Government Involvement Really Necessary: Implications For Systemic Risk And Crop Reinsurance Contracts, Xiaoguang Feng, Dermot J. Hayes

Economics Presentations, Posters and Proceedings

Agriculture is subject to substantial systemic risk of crop yield losses due to widespread natural disasters. The systemic risk has been a major obstacle for the development of private crop insurance markets. Driven by spatially correlated weather events, crop losses are highly correlated within a certain area. As a result, the portfolio insurance risk associated with the crop losses has been raised far above what it would be if individual losses were independent, as proposed by Miranda and Glauber (1997). For example, Miranda and Glauber (1997) find that the portfolio risk faced by U.S. crop insurers is about ten ...


Diversifying Systemic Risk In Agriculture: A Copula-Based Approach, Xiaoguang Feng, Dermot J. Hayes Jul 2014

Diversifying Systemic Risk In Agriculture: A Copula-Based Approach, Xiaoguang Feng, Dermot J. Hayes

Economics Presentations, Posters and Proceedings

One of the biggest obstacles for the development of private crop insurance markets is the systemic risk inherent in crop yields. Driven by spatially correlated weather events, crop losses are highly correlated within a certain area. As a result, the portfolio insurance risk has been raised prohibitively high for viable private crop insurance markets unless subsidized by the government. For example, the portfolio risk faced by U.S. crop insurers is about ten times larger than that of conventional insurance lines (Miranda and Glauber, 1997).


Risk Management For Cattlemen, Tony Latcham Jan 2014

Risk Management For Cattlemen, Tony Latcham

Cornbelt Cow-Calf Conference

Livestock insurance was first sold in 2002 and initially ran into problems as that pilot got underway. As the program evolved bugs were worked through and we ended up with two products that provide price protection for livestock producers at a reasonable cost. In this presentation I will review the two types of livestock insurance available and go through examples of when and where they are appropriate to utilize in your marketing scheme.


Crop Insurance In Iowa, Alejandro Plastina, Chad Hart Jan 2014

Crop Insurance In Iowa, Alejandro Plastina, Chad Hart

Agricultural Policy Review

Farmers across the nation rely heavily on crop insurance as a risk management tool—in Iowa alone over 93 percent of corn and soybean planted area was insured in 2014, but that participation rate hasn’t always been the case. Participation in crop insurance declined substantially in the early 1990s after the mandate that required producers to purchase crop insurance in 1989 and 1990 to collect drought assistance in 1988 dissipated.


Price Expectations And Risk Profiles Drive Commodity Program Choices, Alejandro Plastina, Chad Hart Jan 2014

Price Expectations And Risk Profiles Drive Commodity Program Choices, Alejandro Plastina, Chad Hart

Agricultural Policy Review

The optimal commodity program choice depends as much on the specific production system in each farm as on the producer’s expectations about future yields and prices. Furthermore, the risk profile of producers will weigh heavily in the decision. This article illustrates the role of price expectations and risk profiles in commodity program choice using the ISU Farm Bill Analyzer.