Researchers at University of Manitoba Have Reported New Data on Risk Management (Improving agricultural microinsurance by applying universal kriging and generalised additive models for interpolation of mean daily temperature)

2019 JUL 29 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on Risk Management is the subject of a report. According to news reporting originating in Winnipeg, Canada, by NewsRx journalists, research stated, “Agricultural microinsurance has the potential to protect farmers against crop loss caused by extreme adverse weather conditions. Microinsurance policies for smallholder farmers are often designed on the basis of weather indices, whereby weather insurance variables are measured at ground weather stations and then interpolated to the location of the farm.”

The news reporters obtained a quote from the research from the University of Manitoba, “However, a low density of weather stations causes interpolation error, which contributes to basis risk. The objective of this paper is to investigate whether agricultural microinsurance can be improved by reducing interpolation error through advanced interpolation methods, including universal kriging (UK) and generalised additive models (GAM) used with land surface temperature, elevation, and other covariates. Results indicate that for areas with a lower density of weather stations, UK with elevation substantially improves air temperature interpolation accuracy.”

According to the news reporters, the research concluded: “The approach developed in this paper may help to improve interpolation and could therefore reduce basis risk for agricultural microinsurance in regions with a low density of weather stations, such as in developing countries.”

For more information on this research see: Improving agricultural microinsurance by applying universal kriging and generalised additive models for interpolation of mean daily temperature. The Geneva Papers on Risk and Insurance - Issues and Practice, 2019;44(3):446-480. The Geneva Papers on Risk and Insurance - Issues and Practice can be contacted at: Palgrave Macmillan Ltd, Brunel Rd Bldg, Houndmills, Basingstoke RG21 6XS, Hants, England.

Our news correspondents report that additional information may be obtained by contacting M. Roznik, University of Manitoba, Actuarial Sci & Agr Econ, Winnipeg, Mb, Canada. Additional authors for this research include C.B. Porth, L. Porth, M. Boyd and K. Roznik.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1057/s41288-019-00127-9. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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