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AgriLogic
has applied a unique modeling approach in developing InsuranceVision,
a risk management decision
support tool for individual producers. Undergoing joint design and
development by the USDA Risk Management Agency (RMA) and AgriLogic,
InsuranceVision’s focus is on the education and evaluation of
crop insurance products as effective risk management tools. The goal
of the InsuranceVision effort is to help producers understand the various
insurance programs and to analyze the different programs within the
context of the producer’s specific situation. This goal is achieved
through a unique modeling approach that combines risk management and
crop insurance expertise with model-based yield, climate and economic
projections to provide producers with a powerful web-based analysis
environment. InsuranceVision is needed
due to the large increase in the varieties of crop insurance plans
available to producers in recent years. Most
producers are not crop insurance experts, and often do not have the
knowledge or experience necessary to make the most appropriate business
decisions to protect against risks inherent in their operation. InsuranceVision
will address the producer’s need for rapid retrieval and analysis
of information to aid in the development of their risk management
strategy.
In addition to helping producers understand the various crop insurance
policies, the system places crop insurance into the context of
an overall risk management strategy. This calls for more than just
analysis of a crop insurance policy under certain possible production
outcomes. Instead, sophisticated financial analysis tools that
examine the producer’s current and future financial
condition under possible or expected production and
economic conditions are
necessary. Therefore, InsuranceVision provide analysis
tools that:
- Assess the risk the
producer actually has (based on information provided) and illustrate
the tools that could help
mitigate that risk;
- Analyze risk under
different projected economic and market conditions;
- Assess the risk the
producer faces due to projected climate conditions;
- Provide
probability-based alternatives as to the most appropriate
risk management tools to employ;
Through these analysis
tools, the system helps the producer develop an overall risk profile,
determine the role crop insurance can
play in risk mitigation, and develop
and analyze a set of alternative strategies to manage individual
producer risk.
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