Determination of premium rates for tea cold-frost damage in Fujian Province based on risk assessment

The aim of this study was to improve the rationale of the premium damage insurance rate design for cold-frost damage in tea plants from different risk areas in Fujian Province. In doing so, we first calculated the tea yield decrement rate, both grade and probability of cold-frost damage occurrence by using historical data, so as to determine the pure rate and benchmark rate of cold-frost damage insurance for tea within each county of Fujian Province. Then, we determined the regional premium damage insurance rates for the conditions of each risk area and different triggers, combined with the cold-frost damage risk zoning area. The results showed that under the trigger condition for tea plants damage in Fujian Province, i.e., extremely low temperatures below 4℃, the regional premium damage insurance rates were 1.4%, 4.5%, 7.2%, and 10.2%, respectively, in the northwest area for < 200 m, 200-600 m, 600-900 m, and >900 m altitudes. At the same time, the regional premium damage insurance rates were 0.9%, 2.6%, 4.8%, and 6.4%, respectively, in the northeast area for < 200 m, 200-600 m, 600-900 m, and >900 m altitudes. The regional premium damage insurance rates were 0.5%, 2.3%, 4.0%, and 5.5%, respectively, in the southwest area for < 300 m, 300-700 m, 700-1 100 m, and >1 100 m altitudes. Moreover, the regional premium rates were 0.5%, 1.9%, 3.9%, and 5.4%, respectively, in the southeast area for < 300 m, 300-700 m, 700-1 100 m, and >1 100 m altitudes. In general, the regional premium damage insurance rate increased with latitude and altitude. These results can provide technical support for the actuarial calculation of the premium damage insurance rate in relation to the design of insurance products for the cold-frost damage index of tea plants in Fujian Province.