Agricultural Risk Pricing in Senegal

Abstract

The purpose of this article is to determine the pure premium to be paid by the Senegalese farmer insured at conventional risks. Using the general linear model (GLM), the frequency and severity of different types of risks to farmers were determined. They depend positively on the type of risk and the parameters of the estimated models are all significant. We have shown that the health risks, locusts (wild locusts), wild animals and ducks have higher claims than climatic events (rainfall deficit, floods). Health risks, floods and rainfall deficits are extreme phenomena whose probability of achievement is low. This explains the low premiums of these risks. For better pricing, the insurance company will need to consider the type of risk to which each insured is most exposed and determine the corresponding premium. This segmentation will determine the correct premium.