Loss Insurance Model of Risk for Agricultural Commodity Based on Maximum Daily Rainfall Index Consideration

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Insurance premiums significantly affect risk as they are linked to rainfall patterns, particularly in high-rainfall areas.
The model identifies optimal rainfall indices, with benefits like reduced premiums when accounting for specific crops' needs.
Probability distribution was assessed, with the Burr Type XII distribution being preferred over the GEV distribution.
This framework may enable more equitable insurance options for agricultural commodities facing climate variability.

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Analysis reveals insurance premiums impact risk for paddy in rainfed areas, suggesting a dual approach for drought and flood coverage.

Muna et al. (2025) studied this question.

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