Index Based Crop Insurance Product Design and Ratemaking: The Case of Modified Nais in India

32 Pages Posted: 20 Apr 2016

See all articles by Daniel Jonathan Clarke

Daniel Jonathan Clarke

affiliation not provided to SSRN

Daniel Clarke

University of Oxford

Olivier Mahul

World Bank - Financial Sector Development

Niraj Verma

affiliation not provided to SSRN

Date Written: March 1, 2012

Abstract

Designing and rating insurance products requires both science and judgment. In developing and emerging economies, actuarial procedures must be robust and implementable, as well as offering a sufficient degree of transparency and flexibility so as to allow expert judgment to be incorporated. This paper outlines an approach to designing and rating a portfolio of index insurance products that uses both temporal and spatial aspects of the data to increase the efficiency of statistical estimates. The approach has formed the basis for the design and ratemaking methodology implemented by the Agriculture Insurance Company of India for the modified National Agricultural Insurance Scheme, which was initiated by the Government of India in late 2010.

Keywords: Bankruptcy and Resolution of Financial Distress, Hazard Risk Management, Insurance & Risk Mitigation, Debt Markets, Emerging Markets

Suggested Citation

Clarke, Daniel Jonathan and Clarke, Daniel and Mahul, Olivier and Verma, Niraj, Index Based Crop Insurance Product Design and Ratemaking: The Case of Modified Nais in India (March 1, 2012). World Bank Policy Research Working Paper No. 5986. Available at SSRN: https://ssrn.com/abstract=2016751

Daniel Jonathan Clarke (Contact Author)

affiliation not provided to SSRN

No Address Available

Daniel Clarke

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Olivier Mahul

World Bank - Financial Sector Development ( email )

Washington, DC 20433
United States

Niraj Verma

affiliation not provided to SSRN

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