TITLE:
Agricultural Risk Pricing in Senegal
AUTHORS:
Allé Nar Diop
KEYWORDS:
Risk, Premium, Loss, Pricing
JOURNAL NAME:
Journal of Mathematical Finance,
Vol.9 No.2,
May
15,
2019
ABSTRACT: The purpose of this article is to determine the pure premium to be paid by the
Senegalese farmer insured at conventional risks. Using the general linear
model (GLM), the frequency and severity of different types of risks to farmers
were determined. They depend positively on the type of risk and the parameters
of the estimated models are all significant. We have shown that the health
risks, locusts (wild locusts), wild animals and ducks have higher claims than
climatic events (rainfall deficit, floods). Health risks, floods and rainfall deficits
are extreme phenomena whose probability of achievement is low. This
explains the low premiums of these risks. For better pricing, the insurance
company will need to consider the type of risk to which each insured is most
exposed and determine the corresponding premium. This segmentation will
determine the correct premium.