Impact of climate change on agricultural insurance
Climate change poses significant challenges to agricultural systems, particularly in vulnerable regions like Nigeria, where farming serves as a primary livelihood and economic driver. This study investigates the impact of climate change on agricultural insurance by examining how temperature variabi...
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| Format: | Article |
| Language: | English |
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Universidad Santo Tomas
2025-08-01
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| Series: | Revista Activos |
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| Online Access: | https://revistas.usantotomas.edu.co/index.php/activos/article/view/10865 |
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| author | Noah Gbenga Alli |
| author_facet | Noah Gbenga Alli |
| author_sort | Noah Gbenga Alli |
| collection | DOAJ |
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Climate change poses significant challenges to agricultural systems, particularly in vulnerable regions like Nigeria, where farming serves as a primary livelihood and economic driver. This study investigates the impact of climate change on agricultural insurance by examining how temperature variability, changes in rainfall patterns, and extreme weather events influence crop yield losses, farmers’ claim filing behavior, and premium adjustments. Employing a quantitative research design with a cross-sectional survey approach, data were collected from 300 farmers and 84 insurance professionals using a structured questionnaire. The analysis utilized Partial Least Squares Structural Equation Modeling (PLS-SEM) to assess relationships among latent variables, ensuring reliability and validity through Cronbach’s Alpha, Composite Reliability, Average Variance Extracted, and the Heterotrait-Monotrait Ratio (HTMT). Results revealed significant effects of climate factors on agricultural risks: changes in rainfall patterns (β = 0.673, p < 0.05) exhibited the strongest influence on crop yield losses, followed by extreme weather events (β = 0.568, p < 0.05) and temperature variability (β = 0.412, p < 0.05). Farmers’ claim filing behavior was positively correlated with claim frequency (β = 0.721, p < 0.05) and severity (β = 0.694, p < 0.05), which in turn significantly affected premium adjustments (β = 0.635, p < 0.05). The model demonstrated strong explanatory power, with R² values of 0.64 for crop yield losses and 0.58 for premium adjustments, supported by acceptable fit indices such as SRMR = 0.062 and negative Bayesian Information Criterion (BIC) values across constructs. These findings underscore the critical role of agricultural insurance in mitigating climate-induced risks and highlight the need for innovative products to enhance equity and accessibility in agricultural insurance.
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| format | Article |
| id | doaj-art-c51897e184df493eaa11c7b93318dd2f |
| institution | Kabale University |
| issn | 0124-5805 2500-5278 |
| language | English |
| publishDate | 2025-08-01 |
| publisher | Universidad Santo Tomas |
| record_format | Article |
| series | Revista Activos |
| spelling | doaj-art-c51897e184df493eaa11c7b93318dd2f2025-08-25T23:50:53ZengUniversidad Santo TomasRevista Activos0124-58052500-52782025-08-0123110.15332/25005278.10865Impact of climate change on agricultural insuranceNoah Gbenga Alli0https://orcid.org/0000-0002-8311-9634The Federal Polytechnic, Offa Climate change poses significant challenges to agricultural systems, particularly in vulnerable regions like Nigeria, where farming serves as a primary livelihood and economic driver. This study investigates the impact of climate change on agricultural insurance by examining how temperature variability, changes in rainfall patterns, and extreme weather events influence crop yield losses, farmers’ claim filing behavior, and premium adjustments. Employing a quantitative research design with a cross-sectional survey approach, data were collected from 300 farmers and 84 insurance professionals using a structured questionnaire. The analysis utilized Partial Least Squares Structural Equation Modeling (PLS-SEM) to assess relationships among latent variables, ensuring reliability and validity through Cronbach’s Alpha, Composite Reliability, Average Variance Extracted, and the Heterotrait-Monotrait Ratio (HTMT). Results revealed significant effects of climate factors on agricultural risks: changes in rainfall patterns (β = 0.673, p < 0.05) exhibited the strongest influence on crop yield losses, followed by extreme weather events (β = 0.568, p < 0.05) and temperature variability (β = 0.412, p < 0.05). Farmers’ claim filing behavior was positively correlated with claim frequency (β = 0.721, p < 0.05) and severity (β = 0.694, p < 0.05), which in turn significantly affected premium adjustments (β = 0.635, p < 0.05). The model demonstrated strong explanatory power, with R² values of 0.64 for crop yield losses and 0.58 for premium adjustments, supported by acceptable fit indices such as SRMR = 0.062 and negative Bayesian Information Criterion (BIC) values across constructs. These findings underscore the critical role of agricultural insurance in mitigating climate-induced risks and highlight the need for innovative products to enhance equity and accessibility in agricultural insurance. https://revistas.usantotomas.edu.co/index.php/activos/article/view/10865climate changeagricultural insurancerisk assessmentclaim frequencypremium adjustmentsextreme weather events |
| spellingShingle | Noah Gbenga Alli Impact of climate change on agricultural insurance Revista Activos climate change agricultural insurance risk assessment claim frequency premium adjustments extreme weather events |
| title | Impact of climate change on agricultural insurance |
| title_full | Impact of climate change on agricultural insurance |
| title_fullStr | Impact of climate change on agricultural insurance |
| title_full_unstemmed | Impact of climate change on agricultural insurance |
| title_short | Impact of climate change on agricultural insurance |
| title_sort | impact of climate change on agricultural insurance |
| topic | climate change agricultural insurance risk assessment claim frequency premium adjustments extreme weather events |
| url | https://revistas.usantotomas.edu.co/index.php/activos/article/view/10865 |
| work_keys_str_mv | AT noahgbengaalli impactofclimatechangeonagriculturalinsurance |