Simulation of Crop Insurance Premium With Poisson Process and Exponential Distribution; Case Study on Rice Farming in Village of Sukaratu-East Java

DOI

10.2991/assehr.k.201010.002How to use a DOI?

Keywords

crop insurance, exponential distribution, loss probability, poisson process

Abstract

Agricultural sector is important for human life. However, this sector is threatened by various risks that leads to crop failure and harm for food supply of society. Crop insurance will provide protection against economic losses. This research conducted to develop crop insurance design using sample data on rice farming in Sukaratu village-Cianjur, West Java. Loss probability is measured by the maximum likelihood estimation to determine parameters in the poisson process and exponential distribution. Moreover, the net annual premium is calculated by considering the natural disaster risk index in Sukaratu village. Furthermore, equivalence principle has been fulfilled in estimating the annual premium. Finally, the insurance benefits are simulated in some cases depending on the percentage of harvest.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Primadina Hasanah
AU  - Muhammad Azka
AU  - Novita Lestari Payung
PY  - 2020
DA  - 2020/10/11
TI  - Simulation of Crop Insurance Premium With Poisson Process and Exponential Distribution; Case Study on Rice Farming in Village of Sukaratu-East Java
BT  - Proceedings of the 2nd International Seminar on Science and Technology (ISSTEC 2019)
PB  - Atlantis Press
SP  - 6
EP  - 9
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.201010.002
DO  - 10.2991/assehr.k.201010.002
ID  - Hasanah2020
ER  -