A MODEL FOR DETERMINING PREMIUM RATES IN INDEXBASED CROP INSURANCE

Marija Koprivica; Jelena Kočović; Drago Cvijanović

doi:10.59267/ekoPolj2402397K

Authors

Marija Koprivica Faculty of Economics, University of Belgrade, Beograd, Serbia https://orcid.org/0000-0003-4239-2252
Jelena Kočović Faculty of Economics, University of Belgrade, Beograd, Serbia https://orcid.org/0000-0003-3219-4746
Drago Cvijanović Faculty of Hotel Management and Tourism in Vrnjačka Banja, University of Kragujevac, Vrnjačka Banja, Serbia https://orcid.org/0000-0002-4037-327X

DOI:

https://doi.org/10.59267/ekoPolj2402397K

Keywords:

index-based crop insurance, flood risk, drought risk, premium rate

Abstract

The paper deals with index-based crop insurance as a tool for managing flood and drought risks in agriculture. We introduce a novel model for determining premium rates in index-based crop insurance which combines the loss cost method and the average yield method. The proposed model was applied to data related to the production of selected crops in Serbia to calculate unique premium rates for index-based insurance for cereals, industrial crops and fodder plants. The paper also outlines the prerequisites for index-based crop insurance to become technically, operationally, and financially feasible in Serbia. We propose the introduction of mandatory index-based crop insurance, along with necessary legislative amendments and subsidization of insurance premiums.

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Author Biography

Jelena Kočović, Faculty of Economics, University of Belgrade, Beograd, Serbia

Full Professor

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