AgriLogic has applied a unique modeling approach in developing InsuranceVision, a risk management decision support tool for individual producers. Undergoing joint design and development by the USDA Risk Management Agency (RMA) and AgriLogic, InsuranceVision’s focus is on the education and evaluation of crop insurance products as effective risk management tools. The goal of the InsuranceVision effort is to help producers understand the various insurance programs and to analyze the different programs within the context of the producer’s specific situation. This goal is achieved through a unique modeling approach that combines risk management and crop insurance expertise with model-based yield, climate and economic projections to provide producers with a powerful web-based analysis environment.

InsuranceVision is needed due to the large increase in the varieties of crop insurance plans available to producers in recent years. Most producers are not crop insurance experts, and often do not have the knowledge or experience necessary to make the most appropriate business decisions to protect against risks inherent in their operation. InsuranceVision will address the producer’s need for rapid retrieval and analysis of information to aid in the development of their risk management strategy.

In addition to helping producers understand the various crop insurance policies, the system places crop insurance into the context of an overall risk management strategy. This calls for more than just analysis of a crop insurance policy under certain possible production outcomes. Instead, sophisticated financial analysis tools that examine the producer’s current and future financial condition under possible or expected production and economic conditions are necessary. Therefore, InsuranceVision provide analysis tools that:

• Assess the risk the producer actually has (based on information provided) and illustrate the tools that could help mitigate that risk;
• Analyze risk under different projected economic and market conditions;
• Assess the risk the producer faces due to projected climate conditions;
• Provide probability-based alternatives as to the most appropriate risk management tools to employ;

Through these analysis tools, the system helps the producer develop an overall risk profile, determine the role crop insurance can play in risk mitigation, and develop and analyze a set of alternative strategies to manage individual producer risk.