China’s insurance industry is growing at an alarming rate. The nation has introduced several new laws that make insurance more affordable for citizens and the nation’s market more appealing to foreign companies. One of the fastest growing markets in China is agriculture. AIR Worldwide, a global risk modeling agency, has released a new model assessing the risk of China’s crops. The model is among the first of its kind to be introduced to China and details a number of factors that can influence the pricing of crop insurance in the nation.
AIR’s new model, titled Multiple Peril Crop Insurance Model for China, draws upon data from recent natural catastrophes, such as earthquakes, floods and extended droughts, to detail the potential risk faced by the agriculture industry in the future. The model is designed to accommodate the unique conditions facing the Chinese agriculture industry, including government regulations and the diverse climates found throughout the nation.
The model is likely to have a great impact on the nation’s insurance industry as it is the first of its kind to be accepted by the Chinese government. Prices are expected to rise in places prone to typhoons and other such disasters, while they will sharply decrease in areas that have had few natural disasters in recent years. AIR may introduce changes to the model in the coming months depending on the needs of the industry and the occurrence of any natural disasters that were not foreseen in the model.