1082. Integrated Crop and War Risk Insurance
Invited abstract in session MB-9: Data Science in Insurance and Finance: New perspectives and Applications, stream OR in Finance and Insurance .
Monday, 10:30-12:00Room: Clarendon SR 2.01
Authors (first author is the speaker)
| 1. | Anna Nagurney
|
| Department of Operations and Information Management, University of Massachusetts Amherst | |
| 2. | Ismael Pour
|
| Operations and Information Management, University of Massachusetts | |
| 3. | Borys Kormych
|
| Maritime and Customs Law Department, Odesa Law Academy |
Abstract
Conflicts and wars can significantly disrupt global agricultural supply chains, with severe impacts on food security worldwide. War risk insurance, on the other hand, can mitigate farmers’ losses. In this paper, we use the theory of variational inequalities to construct a new multicommodity international trade network equilibrium model with exchange rates on
general transportation networks joining supply markets with demand markets under different wartime scenarios. The model incorporates capacities on production and transportation, as well as potential commodity losses in transportation. We then propose formulae for integrated crop and cargo war risk insurance premiums that are supply market and commodity specific and incorporate them into the model, along with government subsidies for the premiums. A series of numerical examples, both illustrative and algorithmically solved, reveal the critical role of integrated war risk insurance and government support in sustaining agricultural commodity trade flows and supply market prices as well as protecting the revenue of farmers.
Keywords
- Complex Societal Problems
- Graphs and Networks
- Humanitarian Applications
Status: accepted
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