Factors affecting the demand for index-based agriculture insurance in Poland
Factors affecting the demand for index-based agriculture insurance in Poland

Summary/Abstract: The growing number of catastrophic occurrences is leading more and more insurance companies to re- frain from offering traditional insurance products. The purpose of this study is to examine the factors affecting Polish farmers’ acceptance of a completely new proposition on the Polish market – index- based insurance against drought. Farmers’ acceptance was identified on the basis of a two-stage direct survey, the first covering opinions about the new structure of insurance products, and the next looking at purchasing decisions. A correlation between the area of residence and the level of interest in the new product was detected thanks to a multinomial logit model. On the other hand, the survey indicates hardly any correlation between farmers’ decisions and numerous other particular variables – thus suggesting that their approach to drought is very individualistic. Acceptance of the index structure was much higher than willingness to purchase it. The government’s engagement in index-based insur- ance in the form of a premium subsidy seems therefore indispensable.

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