PRÉMIOS DE SEGURO EQUITATIVOS SÃO CRUCIAIS PARA

• Author(s): Pinheiro, António ; Ribeiro, Nuno ; Surovy, Peter
• Date: 2010
• Persistent ID: http://hdl.handle.net/10174/2046
• Origin: Repositório Científico da Universidade de Évora
• Subject(s): Fogos; Seguros; Floresta; Prémios de seguro; forest fire; insurance
• Document Type: Lecture
• Language: English

Description

Fire is the biggest forest enemy in many countries, especially in those that have dry and hot climates. Fire destroys biomass and makes forest production a very risky business. Forest insurance would decrease fire risk and would contribute to make forest activities more profitable. So, insurance would increase biomass for both reasons: by increasing forest areas and by decreasing the matter destroyed by the fire. Nowadays, in many countries, it is not easy to find companies that want to do fire insurance for forests. The most important reasons to explain this fact are the followings. First, in many countries, forest insurance is not mandatory, so many farmers don’t do it. This increases the risk premium that insurance companies ask for. Second, insurance companies need to have models based on desegregated and reliable data that allow them estimating “fair” risk premiums. Finally, it is very difficult for insurance companies to estimate the real value of the stands (forests) because their values vary from species to species and for the same species with the age. The main objective of this paper is to present simple models that help to estimate “fair” insurance risk premiums, contributing in this way to increase forest biomass.