Research On The Pricing Of Egg Price Insurance Under The ’’Insurance + Futures" Model

With the improvement of Chinese residents’ living standards,the consumption demand for eggs has been increasing year by year,and the scale of laying hens has been expanding.By 2020,the number of egg-related enterprises in China has reached 74,000,and the number of laying hens has exceeded 1.5 billion.At the same time,egg price fluctuates frequently,so it is necessary to strengthen price risk management in order to guarantee the income of laying hens.Agriculture,rural areas and farmers are among the top priorities in the work of the Party and the government.In order to realize agricultural modernization and promote the development of financial service agriculture,the no.1 central document in recent years has repeatedly emphasized the role of "insurance + futures" in serving the development of modern agriculture."Insurance + futures" model can combine insurance,futures,options and other financial products,effectively deal with the price risk of agricultural products through the market mechanism,is an effective measure for the risk management of agricultural operators.This paper takes egg as the research object,firstly clarifies the main connotation of "insurance + futures" mode,deeply analyzes its operation mechanism,and briefly combs several existing "insurance + futures" mode.Then the fluctuation of egg price is measured by and index so as to master the risk of egg market price as a whole.Before the egg price insurance pricing,the price discovery function of futures market is verified,so the option pricing method can be used to calculate the egg price insurance premium.GARCH model is established to fit the volatility of spot price as an important index of option pricing.Then,Monte Carlo simulation method was used to price egg price insurance under the "insurance+ futures" mode,and the results of premium determination were analyzed.The results show that: first,the premium rate of egg price based on futures market is lower than that based on spot price.Premium calculation based on futures market can play a price discovery function and reduce the cost of insurance companies and laying hens.Second,the premium rate of egg price varies greatly under different guarantee levels,so it is necessary to set up multiple guarantee levels to meet different demand of price guarantee.Thirdly,the profit space of insurance companies is expanded.On the one hand,insurance contracts are provided to the main body of laying hens for price risk management.Insurers,on the other hand,transfer potential egg price risk by buying over-the-counter put options.Finally,according to the research conclusions,countermeasures and suggestions are put forward to improve the supporting policy support,improve the relevant mechanism of futures market,innovate insurance product design,and introduce multi-party participation,so as to continuously improve the"insurance+futures"model and provide income security for more agricultural operators.