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Article
Publication date: 27 March 2023

Krish Sethanand, Thitivadee Chaiyawat and Chupun Gowanit

This paper presents the systematic process framework to develop the suitable crop insurance for each agriculture farming region which has individual differences of associated…

Abstract

Purpose

This paper presents the systematic process framework to develop the suitable crop insurance for each agriculture farming region which has individual differences of associated crop, climate condition, including applicable technology to be implemented in crop insurance practice. This paper also studies the adoption of new insurance scheme to assess the willingness to join crop insurance program.

Design/methodology/approach

Crop insurance development has been performed through IDDI conceptual framework to illustrate the specific crop insurance diagram. Area-yield insurance as a type of index-based insurance advantages on reducing basis risk, adverse selection and moral hazard. This paper therefore aims to develop area-yield crop insurance, at a provincial level, focusing on rice insurance scheme for the protection of flood. The diagram demonstrates the structure of area-yield rice insurance associates with selected machine learning algorithm to evaluate indemnity payment and premium assessment applicable for Jasmine 105 rice farming in Ubon Ratchathani province. Technology acceptance model (TAM) is used for new insurance adoption testing.

Findings

The framework produces the visibly informative structure of crop insurance. Random Forest is the algorithm that gives high accuracy for specific collected data for rice farming in Ubon Ratchathani province to evaluate the rice production to calculate an indemnity payment. TAM shows that the level of adoption is high.

Originality/value

This paper originates the framework to generate the viable crop insurance that suitable to individual farming and contributes the idea of technology implementation in the new service of crop insurance scheme.

Details

Agricultural Finance Review, vol. 83 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 8 August 2023

Immaculata Anthony Ekpo and Timothy Tunde Oladokun

Errors or negligence are inherent parts of professional services, thus necessitating the adoption of professional indemnity insurance (PII) as a risk management tool to protect…

Abstract

Purpose

Errors or negligence are inherent parts of professional services, thus necessitating the adoption of professional indemnity insurance (PII) as a risk management tool to protect professional interest. This paper sought to examine the adoption of PII among Estate Surveying and Valuation firms in Oyo State, Nigeria.

Design/methodology/approach

The quantitative research methodology was adopted, and primary data were collected via questionnaires distributed to 84 purposively selected Estate Surveyors and Valuers (ESVs) who are mostly principal partners or branch managers in the study area. Sixty-three questionnaires representing 75.0% were returned and found useable. Data collected were analysed with the aid of descriptive statistics of percentages and relative importance index (RII).

Findings

The study found that the influence of foreign investors as well as the requirements of PII by the professional body as a basis for annual license renewal were responsible for higher level of awareness among the practitioners. However, about average of the firms had adopted PII with few taking professional insurance policy of as low as ₦500,000 per annum. The study recommends that NIESV/ESVARBON should sensitize, monitor and enforce the adoption of PII by ESVs as a means to increase public confidence and credibility of valuers while rendering professional services to clients.

Research limitations/implications

The current study was limited in coverage to Ibadan thus necessitating a study with wider area of coverage of national status.

Practical implications

The study has major implications on real estate education and practice in Nigeria. There is an urgent need for the professional body to devise means of enforcing compliance with the adoption of PII so as to be able to get the confidence of their teeming clients for subsequent patronage.

Originality/value

The paper is one among the scanty studies that provides a useful guide to real estate practitioners in developing countries towards adopting PII to shield the company from unnecessary negative exposure and financial loss.

Details

Property Management, vol. 41 no. 5
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 17 April 2023

Natalie A. Graff, Bart L. Fischer, Henry L. Bryant and David P. Anderson

The purpose of this paper is to evaluate the Dual Use (DU) Option – a crop insurance policy created by the 2018 Farm Bill – relative to other policies available to dual-purpose…

Abstract

Purpose

The purpose of this paper is to evaluate the Dual Use (DU) Option – a crop insurance policy created by the 2018 Farm Bill – relative to other policies available to dual-purpose annual forage producers. The new policy combines existing rainfall-based policies for annual forage crops and multi-peril policies for grain, allowing coverage for multiple crop uses on the same acres during the same growing season.

Design/methodology/approach

The paper uses a simulation model to examine crop insurance choices for a typical Texas dual-purpose wheat farm. The certainty equivalent (CE) of wealth is used to rank choices within and between three insurance plans and to analyze the effects of those choices over a range of producer risk aversion levels and for three cases of yield expectations.

Findings

The DU Option is more preferred as risk aversion increases, but it is not universally preferred. Therefore, while the policy can be a viable risk management tool, certain restrictions may be limiting its effectiveness.

Practical implications

The findings of this paper can help explain farm-level decision making related to dual-purpose annual forage crop insurance program choices.

Originality/value

This paper contributes to the literature by documenting a new crop insurance program made available in the 2018 Farm Bill and provides insights into producers' possible choices by evaluating extensive scenarios.

Details

Agricultural Finance Review, vol. 83 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 20 December 2022

Xuan Liu, G. Cornelis van Kooten, Eric Martin Gerbrandt and Jun Duan

The authors investigate whether an index-based weather insurance (WII) product can complement or replace existing traditional crop yield insurance for mitigating farmers'…

Abstract

Purpose

The authors investigate whether an index-based weather insurance (WII) product can complement or replace existing traditional crop yield insurance for mitigating farmers' financial risks, with an application to blueberry growers in British Columbia (BC).

Design/methodology/approach

A hybrid model combining expected utility (EU) and prospect values is developed to analyse farmers' demand for WII.

Findings

While weather data are used to investigate supply elements, a hybrid model combining EU theory and prospect theory (PT) is developed to analyse farmers' demand for WII. On the supply side, a quality index is constructed and the relationship between the quality index and key weather parameters is quantified using a partial least squares structural model. The authors then model weather parameters via time-series analysis and statistical distributions to provide reasonable estimates for calculating actuarially sound insurance premiums for a rainfall indexed, insurance product. This model indicates that decreases in the proportion of a blueberry grower's total revenue and revenue volatility will decrease the possibility that they participate in WII. At the same time, an increase in the value loss aversion coefficient and WII's basis risk further leads to less demand for WII. In short, a grower may decide not to participate in WII at an actuarially fair premium due to the combined effects of the above factors. Overall, while the supply analysis enables us to demonstrate that WII can potentially help in mitigating farmers' financial risks, it turns out that, on the demand side, blueberry growers are unwilling to pay for such a product without large government subsidies.

Originality/value

The authors argue that the demand for insurance may be affected by the level and the volatility of a berry grower's total revenue. Hence, the authors propose a hybrid expression that assumes a farmer seeks to maximize the total utility function to capture the rational and intuitive parts of a farmer's decision-making process. The EU represents rationality and the prospect value represents the intuitive component. Meanwhile, the authors investigate the possibility of using key weather parameters to construct a berry quality index – one that could be applied to other agricultural areas for studying the relationship between weather conditions and product quality.

Details

Agricultural Finance Review, vol. 83 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 16 August 2022

Pankaj Singh

The purpose of the present paper is to review studies on weather index-insurance as a tool to manage the climate change impact risk on farmers and to explore the study gaps in the…

Abstract

Purpose

The purpose of the present paper is to review studies on weather index-insurance as a tool to manage the climate change impact risk on farmers and to explore the study gaps in the currently existing literature by using a systematic literature review.

Design/methodology/approach

This study analyzed and reviewed the 374 articles on weather index insurance (WII) based on a systematic literature search on Web of Science and Scopus databases by using the systematic literature review method.

Findings

WII studies shifted their focus on growing and emerging areas of climate change impact risk. The finding shows that the impact of climate change risk significantly influenced the viability of WII in terms of pricing and design of WII. Therefore, the cost of WII premium increases due to the uncertainty of climate change impact that enhances the probability of losses related to insured weather risks. However, WII has emerged as a risk management tool of climate insurance for vulnerable agrarian communities. The efficacy of WII has been significantly influenced by repetitive environmental disasters and climate change phenomena.

Research limitations/implications

This study will be valuable for scholars to recognize the missing and emerging themes in WII.

Practical implications

This study will help the policy planners to understand the influence of climate change impact on WII viability.

Originality/value

This study is the original work of the author. An attempt has been made in the present study to systematically examine the viability of WII for insuring the climate change risk.

Details

Journal of Science and Technology Policy Management, vol. 15 no. 1
Type: Research Article
ISSN: 2053-4620

Keywords

Article
Publication date: 7 July 2023

Robyn King, David Smith and Grace Williams

The paper’s purpose is to consider, using a transaction cost economics (TCE) framework, the mechanisms used by space agencies to encourage private investment in the commercial…

Abstract

Purpose

The paper’s purpose is to consider, using a transaction cost economics (TCE) framework, the mechanisms used by space agencies to encourage private investment in the commercial spaceflight sector.

Design/methodology/approach

The authors conducted a content analysis of 554 pages of news articles, relating to issues pertaining to partnerships between national government-based space agencies and private space travel providers, published over a 20-year period. Leximancer was used to initially screen the data and then the authors manually analysed the content to identify themes.

Findings

The data analysis revealed three themes, relating to: the uncertainty of space travel; National Aeronautics and Space Administration (NASA) stimulating innovation in the private sector; and risk, insurance and regulation. These themes informed by TCE reveal the “hierarchical” organisational forms used to achieve human spaceflight and then the “hybrids”, insurance and regulations used to stimulate private sector investment and innovation.

Originality/value

This paper contributes to the accounting literature by answering the calls of Alewine (2020) and Tucker and Alewine (2022a, b) for more research into accounting in the space context. Specifically, the paper contributes by identifying mechanisms used by NASA to stimulate private investment in the space travel sector, as well as issues that have affected the implementation of these mechanisms. The paper also contributes to the literature by, based on the analysis, identifying a series of reflections designed to stimulate further management accounting research in the space context.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 25 July 2023

Elias Abu Al-Haija and Asma Houcine

The purpose of this study is to extend previous literature and examine risk management efficiency among Takaful (TI) and conventional insurance (CI) firms in the Kingdom of Saudi…

349

Abstract

Purpose

The purpose of this study is to extend previous literature and examine risk management efficiency among Takaful (TI) and conventional insurance (CI) firms in the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE). This study also aims to determine whether Takaful firms are more efficient in managing risks, compared to CI firms.

Design/methodology/approach

This study examines risk management efficiency among Takaful and CI firms in the KSA and the UAE for a sample of 20 insurance firms comprising 10 TI firms and 10 CI firms for the period 2018–2020. The authors use Data Envelopment Analysis to estimate efficiency scores among insurance companies to compare risk management efficiency between CI and TI companies and apply two-way analysis of variance to statistically analyze the data.

Findings

The results of this study show that TI firms have a higher efficiency score than CI firms, but not significantly and that insurance firms in KSA have higher efficiency scores than insurance firms in UAE. The results also reveal that TI firms did not significantly outperform CI firms in managing risks; however, there is a significant difference in efficiency scores among insurance firms in KSA and UAE.

Research limitations/implications

The authors also contribute to the literature by providing important insights into how the operational business environment of the country can influence the risk management efficiency of CI and TI companies.

Practical implications

This study promotes understanding the insurance industry, its efficiency and risk management, thus offering key implications for decision-makers, regulators and managers associated with the insurance industry in UAE, KSA and other emerging insurance markets. Regulators could provide enabling policies that foster and promote the business environment, as there is a need to improve risk management efficiency in the insurance industry. Also, the results of this study show that the operating status of the UAE insurance industry in terms of efficiency and risk management is lower than that of KSA. Hence, it would be useful for UAE managers and regulators in taking steps to improve the overall insurance industry market.

Originality/value

The results of this study make significant contributions by providing new insights to the existing literature on the risk management efficiency in the insurance industry, as it adopts a different methodological approach that examines risk management efficiency among TI and CI companies.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 20 June 2023

Krisanthi Seneviratne, Srinath Perera, Buddhini Ginigaddara, Xiaohua Jin, Liyaning Tang and Robert Osei Kyei

This research investigated the impacts of COVID-19 on construction enterprises and good practices adopted by the enterprises in reducing COVID-19 risks. The Sendai Framework (TSF…

Abstract

Purpose

This research investigated the impacts of COVID-19 on construction enterprises and good practices adopted by the enterprises in reducing COVID-19 risks. The Sendai Framework (TSF) is widely accepted as a strategic roadmap to reduce disaster risks throughout the life cycle of a disaster. As such, with the aim of enhancing the resilience of Australian construction enterprises, the identified good practices were mapped with TSF priorities to consolidate COVID-19 risk reduction practices that can be adopted by Australian construction enterprises.

Design/methodology/approach

Case study research approach was used, and three case studies were conducted with small, medium and large construction enterprises. Small, medium and large enterprises were selected based on the Australian Bureau of Statistics classification of the business size. Data were collected through semi-structured interviews conducted with three executive members from the three enterprises. Data were analysed using content analysis.

Findings

The study found that construction enterprises faced demand and supply side impacts. Infrastructure projects, funded by public sector clients and larger enterprises were least affected. Investments and demand for residential and other building projects were reduced by private sector clients, affecting small and medium enterprises. Findings also show that the construction enterprises adopted good practices in identifying, managing, investing on resilience and recovery that align with TSF priorities. All three enterprises agreed on some common good practices on risk identification, risk management and effective recovery. Different views were shared on investments related to disaster resilience.

Practical implications

This study contributes to mitigate the COVID-19 impacts on construction enterprises and subsequent economic and social impacts.

Originality/value

This research found how Australian construction enterprises survived during COVID-19. The study adopted TSF to construction and COVID-19 context while consolidating COVID-19 risk reduction practices.

Details

Built Environment Project and Asset Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-124X

Keywords

Article
Publication date: 6 July 2023

Jason Loughrey and Herath Vidyaratne

The purpose of this paper is to analyse the association between farm/farmer characteristics and unsubsidized farm insurance premium expenditure in Ireland. The distribution of…

Abstract

Purpose

The purpose of this paper is to analyse the association between farm/farmer characteristics and unsubsidized farm insurance premium expenditure in Ireland. The distribution of farm insurance expenditures is wide, and it is important to understand the extent to which individual factors influence demand for different levels of insurance premium.

Design/methodology/approach

The quantile regression approach and farm accountancy data from the Teagasc National Farm Survey are used to model the association between farm/farmer characteristics and farm insurance demand in Ireland.

Findings

Asset values (livestock, buildings and machinery) are positively associated with total insurance expenditure. Both forestry area and crop area are significantly associated with farm insurance expenditure with a stronger influence on the middle and upper part of the distribution. The interaction between farm income and farmer age is positively associated with insurance expenditure pointing to the importance of farm income protection.

Research limitations/implications

The research is mainly concerned with insuring against substantive risks, which are capable of threatening the asset base and continuation of the farm business. Future research can integrate questions in relation to farm safety and farmer health with research on the economic survival of the farm business.

Practical implications

Farmers in Ireland adopt unsubsidized farm insurance as a risk management tool. This situation is relevant to other EU member states including Belgium, Denmark, Germany and Sweden. The findings can be used to inform stakeholders and policymakers about the relative impact of different factors on insurance expenditure.

Originality/value

Previous research has typically focused on the linear relationship between farm/farmer characteristics and insurance demand without accounting for variability across the size distribution. This research is based on the quantile regression approach where the association between farm/farmer characteristics and farm insurance expenditure can be assessed at different points of the distribution.

Details

Agricultural Finance Review, vol. 83 no. 4/5
Type: Research Article
ISSN: 0002-1466

Keywords

Book part
Publication date: 23 October 2023

Glenn W. Harrison and Don Ross

Behavioral economics poses a challenge for the welfare evaluation of choices, particularly those that involve risk. It demands that we recognize that the descriptive account of…

Abstract

Behavioral economics poses a challenge for the welfare evaluation of choices, particularly those that involve risk. It demands that we recognize that the descriptive account of behavior toward those choices might not be the ones we were all taught, and still teach, and that subjective risk perceptions might not accord with expert assessments of probabilities. In addition to these challenges, we are faced with the need to jettison naive notions of revealed preferences, according to which every choice by a subject expresses her objective function, as behavioral evidence forces us to confront pervasive inconsistencies and noise in a typical individual’s choice data. A principled account of errant choice must be built into models used for identification and estimation. These challenges demand close attention to the methodological claims often used to justify policy interventions. They also require, we argue, closer attention by economists to relevant contributions from cognitive science. We propose that a quantitative application of the “intentional stance” of Dennett provides a coherent, attractive and general approach to behavioral welfare economics.

Details

Models of Risk Preferences: Descriptive and Normative Challenges
Type: Book
ISBN: 978-1-83797-269-2

Keywords

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