Index insurances, diversely from traditional agricultural insurances, do not refer to the actual farm losses but to the losses evaluated from an index. The study evaluates the feasibility of index insurances for EU and makes a cross-validation based on the yield loss risk calculated from FADN data. Premiums have been estimated for a Regional Yield Insurance (RYI) for FADN regions and a number of arable crops. Some meteorological, agro-meteorological and NDVI indicators were also analysed according to the model of the area yield-tailored insurance. From the statistical analysis the indicators do not explain yields optimally. Due to the strong heterogeneity within the EU regions, a meteorological yield-tailored index could have a better explanation capacity at a more disaggregated level.
FADN data are used to compute and map the risk of yield reduction for major field crops and of income reduction by farm type. The cross validation of area yield insurance consisted on the calculation of the risk with FADN data with and without insurance. Results show that the risk reduction capacity of yield area index for the case analysed is not very high, but in some regions the risk can be reduced up to a 68%. The risk reduction capacity of other indexes is expected to be lower than the yield area index.
Finally, the study shows that index products efficiency is relatively low at farm level due to the European heterogeneity of climates and geography and to the large geographical scale that had to be used in the study. So, index products could be more efficient for reinsurance that works at aggregated level.JRC.G.3-Monitoring agricultural resource
