| Abstrakt: |
To achieve food self-sufficiency, the government supports agricultural business, one of which is paddy farming. Since 2015 the government has made a Paddy Plant Business Insurance (PPBI) to give planting capital to farmers for the next season if their land is damaged. The PPBI's purpose is to help farmers, especially farmers with the low land area because PPBI only covers up to 2 hectares for each policy. Therefore, the researchers conduct surveys to farmers with a low land area. Besides PPBI, the government has microcredit for agriculture to help the agriculture business. However, right now, the farmers are still having a hard time getting the microcredits because the microcredits provider needs to manage the risk. Therefore, the microcredit program has high risks. Besides that, from the surveys, the farmers said that the benefit from PPBI is still not enough to help them if they take out a loan. Therefore, they said they want an insurance product that can provide claims for the next season's fund and claim credit assistance. Thus, an integration scheme between PPBI and microcredit was initiated, and the researchers used an alternative I-AYI (Individual Area Yield Index) model which enhances good farming practices and also resembles the current PPBI model. In carrying out this research, the data used is farmers' total productivity, by using Monte Carlo simulation with the lognormal distribution. The Monte Carlo simulation is chosen due to no indemnity data availability. The objective of the Monte Carlo simulation is to obtain the empirical data to calculate the appropriate pure premium (exclude expense, profit margin, etc). The credit limit for this research is 30% of each farmer's total revenue obtained from the last planting season. The premium calculation uses Yc values in the range of 4.4±1 sigma with 0.2 intervals. We chose 4.4 because it is the average of paddy productivity in Indonesia from 2005-2015 based on BPS. Hence, we split the calculation for PPBI and microcredits premium, also differentiate premium price over each Yc. The range of Yc on PPBI is within 3.6 up to 5.2 and the price is around IDR 55,357 up to IDR 992,820. Meanwhile, the price PPBI at Yc equal to 4.4 is IDR 387,029. On the other hand, the microcredit premium will be a certain rate within 1.45% up to 25.847% that is evaluated from the credit limit, so that the premium price for each farmer will be different from each other. The gross loss ratio for this scheme is different for each Yc, which is valued in the range of 46%. The gross loss ratio implies that the total paid claim that happens is 46% of the earned premium (in this case is the gross written premium). Based on the gross loss ratio which is lower than 1, it provides room for expense, profit margin, commission, etc for the insurance company. According to the results, this integration can be considered beneficial for the development of crop insurance in Indonesia. [ABSTRACT FROM AUTHOR] |
