Crop Insurance Premium Design Based on
Survival Analysis Model

WANG Erda, YU Yang, Bertis B. Little, and LI Zuozhi

Center for risk management research, School of Management, Dalian University of Technology
Center for Agribusiness Excellence, Tarleton State University

Abstract:
Survival Analysis method has been commonly used in biology, medical science, and human life insurance studies but it is rarely applied in agricultural insurance research. The main objective of this study is to explore the appropriateness of the Survival Analysis model for the crop insurance program design. Our analysis was mainly focused on the catastrophic risk premium rate estimates under the condition of 70% yield coverage for rice, corn and sorghum in Panjin of Liaoning province, China. The results indicate that the estimated premium rates for each crop are consistent with the currently prevailed crop insurance premium rate in Panjin.

Keywords: Crop insurance; Survival analysis; Risk Management; Premium rate; Government supported crop insurance