What is "Rice Insurance"?

"Rice Insurance" is a pioneering P2P insurance model proposed by Kota Kiriya, aimed at managing rice price volatility in Japan—a pressing issue as rice, the nation's staple food, has seen significant price surges. Unlike traditional agricultural insurance, which mainly supports producers, this model includes both producers and consumers, allowing them to share payouts based on their respective volumes of production and consumption. The pricing is determined using SARIMA models, ensuring data-driven and transparent calculations. Benefits include a simple and transparent structure, potential for actuaries to expand into food-related domains, and scalability to other food products. However, challenges such as maintaining fairness between stakeholders and handling poor harvests remain. Solutions proposed include dynamic pricing and diversification of geopolitical risks. This proposal opens new frontiers for actuaries by applying their skills beyond traditional fields into real-life societal issues like food security.