A Shot Noise Process Approach for Calculating the Net Premium of CropsThe Case of Rain Fed Wheat Insurance

In Regards to the difficult condition of production in the agriculture market of Iran, currently agricultural insurance has a straight relationship with agricultural economics.   Lack of using appropriate methods for crop premium pricing will lead to huge deficits for Iranian Agricultural Insurance Fund (IAIF), so for the first time in agricultural insurance pricing in Iran, in this paper the method of shot noise processes has been applied.   The study has been focused on the recorded claims of rain feed wheat, reported by IAIF.   Noting a duality result relating the aggregate accumulated claims, as a method for calculating net premium, and shot noise process and distinguishing its virtues, calculations for net premium and loading factors will be proceeded.   Lastly the results of this paper will be compared with used premium rates in IAIF and the effects of using shot noise process for crop insurance pricing on agricultural economy will be discussed.