Zhou, N.; Vilar-Zanón, J.L. Impact Assessment of Climate Change on Hailstorm Risk in Spanish Wine Grape Crop Insurance: Insights from Linear and Quantile Regressions. Risks2024, 12, 20.
Zhou, N.; Vilar-Zanón, J.L. Impact Assessment of Climate Change on Hailstorm Risk in Spanish Wine Grape Crop Insurance: Insights from Linear and Quantile Regressions. Risks 2024, 12, 20.
Zhou, N.; Vilar-Zanón, J.L. Impact Assessment of Climate Change on Hailstorm Risk in Spanish Wine Grape Crop Insurance: Insights from Linear and Quantile Regressions. Risks2024, 12, 20.
Zhou, N.; Vilar-Zanón, J.L. Impact Assessment of Climate Change on Hailstorm Risk in Spanish Wine Grape Crop Insurance: Insights from Linear and Quantile Regressions. Risks 2024, 12, 20.
Abstract
There is a growing concern about climate change being a serious threat to insurance business sustainability. Knowing if climate warming is a cause for claims and losses increase, and how this cause-effect relationship will develop in the future are two open major questions. In this article, we answer both questions by particularizing the geographical area of Spain, and a precise risk, hailstorm in crop insurance in the line of business of wine grapes. We measure climate change thanks to the Spanish Actuarial Climate Index (SACI). We use a database containing all the claims caused by hail risk in Spain from 1990 to 2022. With homogenized data, we consider as dependent variables the monthly number of claims, monthly number of loss costs equal to one, and monthly total losses. The independent variable is the monthly Spanish Actuarial Climate Index (SACI). We try to explain the former through the latter using regression and quantile regression models. Our main finding is that climate change as measured by SACI explains these three dependent variables. We also give an estimation of the increase of the monthly total losses Value at Risk, corresponding to a future increase in climate change measured in units of SACI. Spanish crop insurance managers should carefully incorporate these conclusions into their decision-making process to keep this line of business sustainable in the future.
Keywords
Climate change; Crop insurance; Hail risk; Quantile regression; Regression (List three to ten pertinent keywords specific to the article; yet reasonably common within the subject discipline.)
Subject
Business, Economics and Management, Business and Management
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
