Agricultural Insurance. Best Practices and Innovative Approaches

Nowadays the role of insurance is underestimated in Russia, especially in the field of agricultural insurance. The problem is not even in trusting the insurer, but in the conditions offered by the insurance sector. As natural-climate risk can be slightly predicted, as in the case of emergence of insured event, almost the entire crop would be lost. Because of this, there is a problem of fair assessment of weather indices, high cost of this procedure, which increases the cost of insurance. In addition, the legislation introduces some restrictions on agricultural insurance, and the proposed terms of support do not cover the losses of farmers. The legislation finances only a part of the insurance payment from the Federal budget. For all these reasons, only a small part of large farmers insure their risks. On the international market of agricultural insurance the same products and insurance systems are used, but there are offered absolutely other instruments of insurance, which operate with greater efficiency. Thus, this study is aimed at finding alternative ways of insurance in Russia by analyzing the existing systems and methods of insurance.