Pricing Mechanism and Effect Evaluation of "Insurance+Futures" in Managing Hog Breeding Market Risks
Based on the dual perspectives of breeding costs and market prices,this paper firstly ex-plores the market conditions,scheme design and pricing mechanism of"insurance+futures"serving in China's risk management of hog breeding market.Risk management effects are further analyzed in view of the dual functional positioning of"price insurance"and"reinsurance".The results suggest that vola-tility and insurance period are the crucial variables in determining the premium rates of"insurance+futures",with the premium rate for hog insurance remaining below 6％only within a 2-month period.Moreover,short-term and multi-batch underwriting adapts effectively to the characteristics of the circular rolling production of livestock breeding,but their risk transfer efficiency and"reinsurance"function are constrained by the absence of exchange-traded options,transaction fees,liquidity costs,etc.Finally,we propose continuously fostering market development,strengthening business risk control,and establishing a sound product supply system to promote the advancement of"insurance+futures"in serving high-quality development of the hog breeding industry.
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