Operational Model for Agricultural Insurance

Shanghai Anxin model. This is a model in which a company runs agricultural insurance operations. The Shanghai municipal government founded Anxin Agricultural Insurance Company Ltd, the first professional agricultural insurance company in China in 2014 with an operation model of integrating government fiscal subsidies with commercial operations. Insurance programmes for the traditional planting and breeding industries introduced by the company could be supported by government policies. Fiscal departments at the city, county and district levels would provide insurance premium subsidies for agricultural insurance that followed the development of Shanghai's agricultural industry. However, insurances of property, rural residents' health and others were run by commercial operations, whereby commercial insurance surplus would be used to offset the loss incurred by the insurances of planting and breeding industries, in a bid to achieve the so-called "funding insurance with insurance". The Anxin model of "government fiscal subsidies, funding insurance with insurance" works well in Shanghai, but cannot be universally applied because Shanghai is not only economically and financially strong but has an agricultural sector that accounts for a smaller share of its gross domestic product, which means that the Government can offer financial and policy support at the same time.

Zhejiang "Insurance Community" model. In the context of frequent natural disasters and heavy losses of agricultural insurances in Zhejiang province, it pioneered an operation model called the "Zhejiang Policy Agricultural Insurance Community". With the participation of seven commercial insurance companies that included the People's Insurance Company of China, the China Pacific Insurance Company, China Continent Insurance, Anxin, the China Zheshang Bank, Yong An Insurance and China United Property Insurance Company, the Insurance Community offers independent establishment of accounts, independent accounting, profit sharing and risk pooling, whose day-to-day business is entrusted to the Zhejiang Branch of the People's Insurance Company of China as Chief Contractor, and whose members share insurance premiums and risks, enjoy policies and provide insurance services together.

Heilongjiang "Mutual Support" model. Sunlight Agricultural Mutual Insurance Company was set up based on the former "mutual support against risks" system of the Heilongjiang Farms and Land Reclamation Administration. Mutual insurance is a group composed of people who have the same requirement of insurance against certain hazard. Group members pay insurance premiums to create a fund that can be used to make up for losses caused by disasters. It unites the identity of an insurer and that of the insured into one to reduce moral hazards.