Catastrophe modelling firm AIR Worldwide has released a Multiple Peril Crop Insurance Model for India designed to aid probabilistic assessments of potential losses caused by yield shortfalls.
The event-based model covers 11 major crops across the two main growing seasons in India: Kharif – the summer period from late spring into autumn – and the following rabi season – the winter period from autumn into the following spring.
The model boasts a stochastic catalogue of 10,000 simulated crop years describing a wide range of possible crop loss scenarios, both common and rare, in the two seasons. It also features a historical catalogue of losses based on a recast of the years 1979 through 2017.
AIR says both the stochastic and historic recast yield and loss catalogues reflect current crop technology levels – for example, current crop genetics, farmer skill, availability of chemical inputs, insurable exposure by district, and PMFBY (Pradhan Mantri Fasal Bima Yojana) policy conditions as revised in late 2018.
“One of the many challenges in developing and testing an MPCI model for India crops is the collation and evaluation—quality assuring—of the available historical data on planted areas and yields of insured crops, which comes from various, sometimes contradictory sources,” said Dr. Jeff Amthor, assistant vice president, AIR Worldwide.
“Despite the long and extensive history of agriculture in India, it is only recently that multiple-peril crop insurance has been widely available to farmers,” added Dr. Praveen Sandri, executive vice president and managing director, AIR Worldwide India.
“One of the most valuable components of this model is that reinsurers in the India crop market can have their exposure data analyzed at the district level or aggregated to the cluster and/or state level for individual crops or all crops combined.
“Additionally, the model can provide guidance toward putting together a balanced book of business that considers geographic correlations in a complex agricultural market.”
