A study developed in the Graduate Program in Statistics and Agronomic Experimentation, from the Luiz de Queiroz Higher School of Agriculture (Esalq / USP), presented alternative methods for pricing of agricultural productivity and billing insurance.
In the pricing of productivity insurance, Gislaine Vieira Duarte, author of the paper, used parametric distributions that capture the symmetry, asymmetry and bimodality of the data, “characteristics usually found in Brazilian soybean productivities and that should be taken into account in order to obtain the actuarially fair and more accurate award. ” On the other hand, in the pricing of the billing insurance, the copulas methodology was used in the multivariate analysis between soybean yield and prices (two-dimensional analysis).
In the case of productivity and billing insurance (three-dimensional), the results suggest that the rates charged by insurance companies are overpriced when compared to the presented methodology. “The overestimation of the rate hampers the significant sale of insurance in Brazil, in addition to attracting farmers with greater risks, strengthening the problem of adverse selection.”
In the case of (two-dimensional) billing insurance, where the currency (dollar) influence on modeling is not taken into account, “the results suggest that insurers underestimate billing insurance rates, which can lead to a large loss for the insurer because it may be considering a much lower risk than it should be taken into account. ” The thesis was directed by Professor Vitor Augusto Ozaki, from the Department of Economics, Administration and Sociology.
This text was translated by machine from Brazilian Portuguese.