Computations of risk premium rates for crop insurance

• Main Authors: Catapang, Christine M., San Pablo, Maria Lucia SM.
• Format: text
• Language: English
• Published: Animo Repository 1999
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/16560
• Institution: De La Salle University

Crop insurance has long been existing but has yet to be recognized. The Philippine Crop Insurance Corporation (PCIC) was established to serve the needs of Filipino farmers. These farmers pay a total premium, which is composed of risk premium and the loadings, regardless of the season for the whole Philippines. This paper aims to create a risk premium rate for Luzon, Visayas and Mindanao separately for wet and dry season based on a statistical proof that the season greatly affects the claims made by farmers during disasters. Using Hypothesis Testing and the Statistical Analysis System (SAS), it was shown that in Luzon there is a need to separate wet and dry risk premium rates. However, for Visayas and Mindanao it was proven otherwise. With these results, a single risk premium rate for these two (2) areas were obtained. The risk premium rates were attained through the derivation of equations from life insurance adjusted to non-life insurance conditions.