Agricultural weather index insurance (WII) has been introduced in pilot or experimental form in many countries. However, the effective demand for WII is often limited by the impact of the basis risk. Thus, the purpose of this paper is to propose a new type of double trigger product, named “supplement” type, to reduce basis risk and improve the performance of the standalone WII.,Two measures of performance are introduced by the certainty equivalent income of expected utility theory. Through the Monte Carlo experiments and empirical study, this paper compares the performance of three types of double trigger products.,The findings indicate that the supplement type can significantly improve the performance of the single weather index product. First, it covers the downside basis risk and the catastrophic basis risk when the standalone WII fails to do so, especially in case of extreme losses. Second, it is superior when the correlation between the weather index and the yield index is not so strong, and can further enhance the performance of insurance even when the weather index and the yield index are highly correlated, for which the standalone WII could perform well.,The supplement type double trigger product proposed in this paper as an enhancement version finds a more preferable way to improve the standalone WII with relative lower complexity.

中文翻译：

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具有天气指数和收益指数的双触发农业保险产品

农业天气指数保险（WII）已在许多国家以试点或试验形式引入。但是，对WII的有效需求通常受到基本风险的影响。因此，本文的目的是提出一种新型的双触发产品，称为“补充”类型，以降低基础风险并提高独立WII的性能。期望效用理论。通过蒙特卡洛实验和实证研究，比较了三种类型的双触发产品的性能。研究结果表明，补品类型可以显着提高单一天气指数产品的性能。第一，当独立的WII无法做到这一点时，它涵盖了下行基础风险和灾难性基础风险，尤其是在极端损失的情况下。其次，当天气指数与收益率指数之间的相关性不是很强时，它是优越的；即使天气指数与收益率指数高度相关，它也可以进一步提高保险的绩效，独立WII可以很好地发挥这种作用。本文提出的增补型双触发产品作为增强版本，找到了一种以较低的复杂度来改进独立WII的更可取的方法。