The rating models for crop insurance involve conducting numerous objective risk analyses to determine the parameters of the potential threats to crop production, the frequency and severity of the threats, and the expected losses. As part of this work, significant issues have arisen in identifying appropriate data. Many situations have been presented wherein data availability was limited or nonexistent. The data requirements for the analysis must be identified. In situations when data sources were not available, AgriLogic has overcome these challenges by soliciting individual producers and corporations to supplement data to provide appropriate parameters. Once the data is acquired, these factors then feed into a rating methodology which determines the premium rates for the policy.

The rating for each policy must be able to factor in the specific variables for each crop and peril. The rating methodology must provide the ability to add and subtract different hazards, various stages in the crop production and the distribution of the hazards. Regional and climatic differences must also be accounted for in the rating methodology. An example of modeling risk from aggregations of specified crop hazards is provided in the figure below.

In developing the estimating models, AgriLogic has gained experience in assessing the risk of a variety of biologic crop hazards—from Asiatic Citrus Canker to Pierce’s Disease to Crown Gall.