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Agricultural Risk Pricing in Senegal

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Document pages: 20 pages

Abstract: The purpose of this article is to determine the pure premium to be paid by theSenegalese farmer insured at conventional risks. Using the general linearmodel (GLM), the frequency and severity of different types of risks to farmerswere determined. They depend positively on the type of risk and the parametersof the estimated models are all significant. We have shown that the healthrisks, locusts (wild locusts), wild animals and ducks have higher claims thanclimatic events (rainfall deficit, floods). Health risks, floods and rainfall deficitsare extreme phenomena whose probability of achievement is low. Thisexplains the low premiums of these risks. For better pricing, the insurancecompany will need to consider the type of risk to which each insured is mostexposed and determine the corresponding premium. This segmentation willdetermine the correct premium.

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