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| Babcock, Bruce A.; Hayes, Dermot J.; Griffin, Steven C.. |
| Building on recent work by Mirand and Glauber (1997), this report shows that it is feasible to use exchange-based contracts as a substitute for the Standard Reinsurance Agreement (SRA). The contract we analyze here is a Group Revenue Contract, which would allow producers to guarantee against reductions in county-level revenues. The insurance company would then purchase put options on an exchange-based revenue contract to protect against statewide revenue shortfalls. The analysis suggests that this reinsurance tool would eliminate most though not all of the systemic risk associated with this product. The insurance company would have to purchase supplemental reinsurance to complement the exchange-based product, but the level of reinsurance needed would not... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Exchange-based revenue; Agricultural insurance; Reinsurance; Risk management; Risk and Uncertainty. |
| Ano: 1999 |
URL: http://purl.umn.edu/18408 |
