This manual presents theoretical concepts and applied methods commonly used for actuarial processes in agriculture insurance. Actuarial processes refer to the activities that establish insurance premium rates and related quantitative analyses. Key considerations for designing agriculture insurance programs are presented. In addition, the infl uence of program design on data requirements and the use of statistical methods for establishing insurance premiums are illustrated.

The presentation presumes that readers have a solid understanding of basic statistics principles. The level of knowledge would be equivalent to material contained in an introductory university-level statistics textbook. Readers are encouraged to familiarize themselves with basic statistical principles, including descriptive statistics, hypothesis tests, sampling, regression analysis, and distribution theory.

Although most of this document is devoted to actuarial issues, program  design features are noted throughout. For conciseness, the manual will discuss actuarial processes associated with a specific agricultural insurance product: yield insurance. The principles and methods presented are, in general, applicable to other crop insurance products, but every insurance product has unique features that further complicate actuarial processes.