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Corresponding author:
1 Vinnytsia National Agrarian University, Ukraine.
ORCID: https://orcid.org/0000-0003-3072-4854
E-mail: aleskrovaaleskerova@gmail.com
2 Uman National University of Horticulture, Ukraine.
ORCID: https://orcid.org/0000-0002-0532-136X
E-mail: lavreniukliuba@gmail.com
3 Podillia State Agricultural and Technical University, Ukraine.
ORCID: https://orcid.org/0000-0002-4685-5544
E-mail: vitagavrilyuk1@gmail.com

DOI: https://doi.org/10.30525/2256-0742/2019-5-4-34-41

INNOVATIVE FINANCIAL CRITERIA FOR METHODOLOGICAL 
APPROACHES TO THE ASSESSMENT OF AGRARIAN INSURANCE

Yuliia Aleskerova1, Liubov Kovalenko2, Vita Havryliuk3

Abstract. The purpose of this article is to study the experience of financial support of agricultural insurance 
system of Ukraine. Investigated peculiarities of innovative financial criteria of methodological approaches to the 
estimation of agrarian insurance methodical provision of process and technologies of agricultural insurance are 
evaluated. The content and principles of functioning of the mechanism of agricultural insurance are revealed. 
Methodology. The methodical approaches for determining the target indicators of a comprehensive assessment of 
the development of the agricultural insurance system and its criterion characteristics are developed. Agricultural 
insurance is considered an area of insurance that is technically demanding. The state is considered and trends and 
regularities of insurance development are revealed. An assessment of the suitability of any agricultural insurance 
service should take into account the production system; asset type; key risk factors that are subject to insurance; 
location of agricultural land; data availability; the size of the farm; sales channels. The research was based on 
the use of a systematic approach to the consideration of financial phenomena, on the fundamental positions of 
economic theory, system theory, the theory of finance, insurance management, etc. The quality in the hypostasis 
of the philosophical category characterizes the stable property of the phenomenon in the dynamics of its 
general development. Results. The practice and peculiarities of insurance protection of agricultural commodity 
producers are traced. The advantages and disadvantages of an assortment of insurance products are determined.  
The main internal and external factors influencing the mechanism of agricultural insurance have been identified. 
Practical implications. Deepened scientific ideas about the formation of the insurance policy. Unification is carried 
out according to different algorithms. This is due to the expediency of unifying the components for which the 
ranking is from the highest to the lowest. Value/originality. The essence of state support of agricultural insurance 
is determined. Innovative tariff policy is proposed and possibilities of application of non-traditional agricultural 
insurance products are revealed. The recommendations for determining the main landmarks and the dominant 
components of the development of agricultural insurance system development strategies have been formed. 
The conceptual platform for harmonization of the mechanism of agricultural insurance and improvement of its 
institutional and infrastructural component is substantiated.

Key words: agricultural insurance, socio-psychological concept, development, financial, relations, innovation, 
investment, processes, analyse.

JEL Classification: O31, G22, J43, Q14

1. Introduction
The fundamental transformations in the agricultural 

insurance system conditioned by qualitatively 
new economic conditions limited the binding 
nature of insurance protection methods, which 
were constantly used as state levers of influence on  
agriculture.

Agricultural activities face risks linked to market 
trends and environmental conditions, in particular, 
climatic conditions and in Italy, the heterogeneity of 
the territory determines a high variability of conditions 
and productions. These natural factors, associated 
with the scenarios of climate change, increase the 
level of uncertainty for agricultural activities, strongly 



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influencing the interaction between climate and crops’ 
cycles (quantity and quality of productions) and 
between climate and farms’ investments (damages 
to equipment and infrastructures caused by extreme 
weather events). In order to manage risks in agriculture, 
one of the most important instruments used in the 
Italian agricultural sector is the insurance system 
that without doubts can be one of the central climate 
change adaptation options. In facts, agricultural 
insurance allows managing a wide range of risks and 
it is theoretically enough flexible to adapt itself to 
changed conditions and priorities.

However, the model of voluntary insurance with 
insurance subsidies remains acutely debatable. 
Currently, the domestic agricultural insurance system 
is slowly developing at the expense of formal schemes 
mainly in the extensive format and is accompanied 
by a variety of financial, informational, analytical, 
organizational and institutional and infrastructural 
issues. The problems of increasing the quality of 
insurance products, combining and harmonizing the 
interests of participants in the system of agricultural 
insurance, its structural modernization remain 
unresolved. In the present, there is a controversial 
process of finding its own model of development of the 
agricultural insurance system. 

At the same time, they were closely intertwined with 
the remaining models of the administrative economy, 
as well as the latest, progressive ones. In this section, 
it is objectively necessary to consider the research of 
theoretical, methodological and practical aspects, the 
development on the scientific platform of strategies and 
a set of measures on the development of agricultural 
insurance system, taking into account the various 
instruments of state influence.

2. Economic crisis effects  
on consumer behaviour

The system of agricultural insurance as in any financial 
system is characterized by two driving forces – a desire 
to preserve itself and have some firmness and a desire to 
develop and modernize.

We can’t but agree with H. Visem who argued that 
now replacing the old ideas: “at first preservation and 
only then development,” an increasingly established 
understanding: “preservation through development” 
since self-preservation without self-perfection and 
constant adaptation to the external environment leads 
to destructive processes and destroys the very economic 
system. The concept of “development” is considered 
rather complex in conjunction with the economic 
system so it is important to consider its interpretation 
in two formats. The first format defines development as 
a philosophical-scientific concept, in the second format 
we consider it in the cut of the economic system and 
more specifically in the cut of the system of agricultural 
insurance (Aleskerova, 2015).

In the dictionaries, it is indicated that “development 
is a philosophical, economic, and socio-psychological 
concept, the meaning of which is concentrated in 
irreversible, purposeful, and logical changes of material 
and ideal objects” (Aleskerova, 2015).

Only “simultaneous synthesis of all three properties 
distinguishes development among other changes” 
(Aleskerova, Fedoryshyna, Koval, 2018). Various 
interpretations of the category “development” are 
presented in Table 1.

Thus, the meaning of development is focused on the 
fact that this is a special kind of movement, which is 
characterized by three characteristics: quality, quantity, and 

Table 1
Interpretation of the concept of “development”

Author Definition
A. Vasilenko The acquisition of a new quality that strengthens viability in the context of changing the environment.

O. Shubravska 
The process of transitioning a system from one state to another, which is accompanied by a change in its qualitative and 
quantitative characteristics.

L. Zabrodska
The dynamics of the transition of the economics and production system into a new more qualitative state by the 
accumulation of quantitative potential, changes and complications of structure and composition, the echo of which is to 
increase its ability to withstand the destructive effects of the environment and the efficiency of the activity.

M. Mescon, 
M. Albert, 

F. Khedouri 

Long-term program to improve the ability to solve various problems and ability to recover, especially by improving the 
management of the culture of the organization.

E. Korotkov 
The set of changes that lead to the emergence of new quality and strengthening the vitality of the system, its ability to 
resist destructive forces of the environment

O.V. Rayevneva 
A unique process of transformation of an open system in space and time characterized by a permanent change in the 
global goals of its existence by forming a new dissipative structure and translating it into a new attractor of functioning.

V. Dovbenko 
The dynamics of the state change of an object by improving its characteristics and a qualitative, quantitative increase of 
parameters.

M. Afanasyev 

The objective change only of the qualitative characteristics of the system is determined by the fundamental laws of nature 
(the unity and struggle of opposites, the transfer of quantity to quality, the progress of society in a spiral and upward) 
and the laws of the activity of specific systems (aging equipment, accumulation of experience and knowledge of workers, 
depletion natural resources) in which the new properties of the system are formed



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structure. Quantitative transformations are characterized 
by an increase or decrease in the number of components 
of the system or their quantitative characteristics, which 
after a certain time leads to qualitative transformations 
in accordance with the provisions of the law of transition 
of quantitative ones – into qualitative changes and vice 
versa. Structural transformations should be considered as 
changes in the interconnections of system components, 
which may not be accompanied by an increase or 
a decrease in their number.

Predominantly, the number of components remains 
unchanged but structural transformations lead to 
qualitative changes as internal contradictions are the 
driving force behind development. The process of 
development through internal contradictions is defined 
by the law of unity and the struggle of contradictions. 
The source of quantitative transformations is the 
contradiction with the external environment, the source 
of structural transformations is internal contradictions.

Qualitative transformations can be expressed through 
extrapolation: by attracting matter and energy, through 
interaction with the external environment and through 
the differentiation of the system without its deformation 
and imbalance or as a change in the quality of the 
components or subsystems of the system.

Thus, we are convinced that the development of the 
agricultural insurance system should be understood as 
the aggregate transformation of interdependencies of 
qualitative, quantitative, and structural characteristics. 
A significant influence on the level of development of 
the system of agricultural insurance is its design since 
the composition and interconnection of components of 
the qualitative changes and the content of the system.

3. Differences in consumer spending  
behaviour among age groups

The development of the agricultural insurance system 
is a complex and multi-faceted dynamic, which in 
a certain time interval can display progressive, regressive 
or stagnant characteristics, it is defined by the system of 
certain values and landmarks and it possesses the ability 
to change its composition, functions, components, 
subsystems. 

Thus, the development of the system of agricultural 
insurance contributes to the development of all its 
components and systems of a higher order: development 
of insurance, development of agriculture as an industry, 
development of agricultural commodity producers, 
development of infrastructure, institutions, financial 
relations, innovation and investment processes, etc.

The development of the agricultural insurance 
system can also be outlined through the mega system 
of the “external environment – the system” since the 
agricultural insurance system is considered an open 
system, which has close ties and constantly interacts with 
external components. The set of all factors, mechanisms, 

preconditions should ensure the development of the 
system of agricultural insurance.

It is important to distinguish between “development” 
as a certain process and “development” as a certain 
result. These two linked formats are interconnected. 
The first format shows the directions, mechanisms, 
tools for achieving the goal, the other – demonstrates 
the effectiveness of development, the speed and 
completeness of achieving the goal, the formation 
of prerequisites for the effective development of the 
system. In practice, the format “development – process” 
acts as a platform for the format “development – result” 
(Aleskerova, 2018).

The basis of the development of the agricultural 
insurance system is the transformation: within the 
system and in the relationship between the system and 
the environment. The development of the agricultural 
insurance system can be due to a combination of 
transformations: the link between transformation and 
development can be considered as causal, consequential, 
reciprocal, interdependent, and recursive. Interestingly, 
the crisis and the deformation of the environment are 
predominantly an impetus for transformation. The key 
purpose is to destroy and replace the least sustainable 
and viable components that violate the unity of the 
agricultural insurance system. Crises and deformations 
may deepen, which is explained by unfavourable 
environmental events.

The above circumstances caused the relevance 
of this article, which aims at analysing innovative 
financial criteria for methodological approaches to the 
assessment of agrarian insurance introduction.

To achieve this purpose it is necessary to investigate 
innovative financial criteria for methodological 
approaches to assessing agricultural insurance.

4. Survey methodology
The methodological basis of the research is the 

general economic method of ascending from abstract 
to concrete, theoretical achievements of domestic 
and world financial science, conceptual provisions of 
modern insurance theories. The research was based on 
the use of a systematic approach to the consideration 
of financial phenomena, on the fundamental positions 
of economic theory, system theory, theory of finance, 
insurance management, etc.

Thus, the development of the agricultural insurance 
system is multidimensional and outlines the deep 
transformations in all its components. This development 
should take into account all interconnections and 
interdependencies. Therefore, in order to determine 
the criteria and methodological approaches to assessing 
the development of the agricultural insurance system, 
it is appropriate to consider this development in the 
interconnection and interdependence with other 
components of the environment.



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It is worth pointing out that in revealing the axioms 

of the complex economic systems, the thesis concerning 
the necessity of a criterion for the harmonious 
development of the system should be deepened by 
provisions regarding some uncertainty of this criterion 
and the expediency of its refinement and concretization. 
This provision is considered fundamental, although in 
its turn it causes uncertainty and risk and contributes 
to the construction of a qualitatively new system of 
agricultural insurance.

Interesting, many researchers are of the opinion that 
any economic system is evolving through information 
flows. E. Pestel noted that “uncertainty is generated 
when there is a lack of exhaustive exact information or 
there is no knowledge of the phenomenon or object of 
the search”.

The quality in the hypostasis of the philosophical 
category characterizes the stable property of 
the phenomenon in the dynamics of its general 
development. That is, the quality reveals the properties 
of agricultural insurance, outlines its objective 
characteristics, essential characteristics, and functional 
characteristics. Without defining qualitative signs of 
the system of agricultural insurance, it is impossible 
to identify and explain the logic and trends in its 
development. Qualitative transformations expand and 
deepen the content of agricultural insurance. We can’t 
but agree with the philosophers who claim that quality 
is “the primary direct determinate of being.” At the same 
time, the quality of agricultural insurance depends on 
quantitative characteristics and doesn’t manifest itself 
without them.

The number is considered an objective characteristic 
“indifferent in being.” The number is an external 
property, an attribute of the phenomenon including 
agricultural insurance. These two characteristics (quality 
and quantity) don’t manifest themselves without one 
and they are objective signs of the system of agricultural 
insurance. That is the criteria of development of the 
system of agricultural insurance; it is expedient to 
consider both qualitative and quantitative parameters. 
They are mutually interconnected; there are direct 
and back links and mutual influence. Quantitative 
transformations in agricultural insurance, which reflect 
its objective characteristics, appear in a certain quality 
circle (mention, in particular, the historical development 
of quantitative parameters of agricultural insurance in 
the cut of its qualitative characteristics).

Qualitative and quantitative characteristics of the 
development of the agricultural insurance system are 
estimated by measure. The philosophical category of 
measure serves as a kind of objective criterion between 
qualitative and quantitative indicators of agricultural 
insurance. The measure serves as contradictory unity, 
in which the qualitative characteristic is determined 
by quantitative (that is, quality is defined by the 
appropriate number) and the quantitative characteristic 

is determined by a qualitative (that is, the number 
corresponds to a certain quality).

The distortion of the measure deforms the 
qualitative properties of the agricultural insurance 
system; it changes and acquires new qualitative 
features. Demonstrates a qualitative outbreak or 
“continuity of graduality”, that is, there is a jump from 
a certain qualitative state to another qualitative state. 
“Graduality” and “leap” are considered indissoluble, 
interconnected components of the development of 
agricultural insurance. The dialectical unity of these 
components is due to the consistency and qualitative 
differences between the unceasing cycles of the 
development of the agricultural insurance system as 
a complex economic phenomenon. These differences 
and interconnections demonstrate their echo in the 
evolutionary and revolutionary cycles of agricultural 
insurance development. In accordance with the 
provisions of the law of the transition of quantitative 
transformations to qualitative, the formation and 
development of the system of agricultural insurance 
must be carried out by gradually multiplying the 
quantitative components, parameters, transformations 
and jump to a qualitatively new level of functional 
transformations, from one state of the system of 
agricultural insurance to a qualitatively different.

Demonopolisation of domestic agricultural insurance, 
access to the insurance market of a large variety of private 
insurers explains radical qualitative changes in the system 
of agricultural insurance. Practically, there was a “leap” as 
the system of agricultural insurance began to be formed. 
Thus, there was a shift in quantity to quality. At the same 
time, the new quality of the agricultural insurance system, 
which is demonstrated in increasing its role in solving 
socio-economic problems of agricultural producers, 
determines the appearance of new quantitative 
transformations. The development of agricultural 
insurance requires an increase in the capitalization of 
insurers, in particular, through mergers, acquisitions, 
unions. The fall in the number of insurance companies 
with a simultaneous increase in insurance capital will 
increase the opportunities for agricultural insurance 
and will lead to new qualitative transformations. Such 
dynamics is carried out continuously. The transition 
of quantitative transformations into qualitative ones 
leads to the objective estimation of quantitative and 
qualitative characteristics, internal and external factors 
of agricultural insurance. Only by this approach, one can 
impartially investigate various quantitative changes in 
the system of agricultural insurance, explain the laws of 
its development, give them an objective assessment, de-
mask their qualitative deep sense and, on this platform, 
ensure the formation of appropriate financial conditions 
for the harmonious development of the agricultural 
insurance system.

The development of a system of agricultural insurance 
is important to consider in view of the interests of the 



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state, insurer, insured person since their synthesis 
reflects the effectiveness of the whole system. 

A criterion for the development and effectiveness of 
the agricultural insurance system is a certain ratio of 
quantitative indicators and qualitative characteristics, 
which can be used to assess the relationship between the 
state, insured persons, and insurers.

The criteria for the development and efficiency of the 
agricultural insurance system are:
– ensuring the firmness and stability of the expanded 
reproduction of agricultural production;
– provision of agricultural insurance utility functions for 
all participants; 
– coverage of insurance products by the risk maps of 
agricultural commodity producers;
– the fullness of damages;
– ensuring the adequacy of insurance reserves; 
– quality, breadth of assortment, and profitability of 
insurance products;
– balance and availability of agricultural insurance; 
– the efficiency of agricultural insurance; 
– the rise of capitalization of insurers;
– transparency of the system of agricultural insurance.

Let’s consider more carefully some of the criteria. The 
meaning of the coverage criterion of insurance products 
by the risk maps of agricultural producers is focused on 
providing agricultural products with insurance products 
for most of the identified agricultural risks. The risk map 
is a matrix-text description of the identified risks of 
agricultural commodity producers, which demonstrates 
the intensity of the impact, its significance, weight, 
and generation probability. Formation of a matrix of 
risk maps for agricultural producers is a laborious and 
time-consuming procedure. By gathering the necessary 
information array for systematization and generalization 
of agricultural risks, a significant information base is 
formed (Aleskerova, 2017).

The assessment of agricultural risks (Q) is expedient 
to carry out by the two-factor method of Peter-Ryan: 
Q=Z*J,

where Q – the probability of adverse events; J – the 
significance of adverse events (Aleskerova, Fedoryshyna, 
Koval, 2018).

It is important to take parameters of the probability of 
adverse events at the level of average insurance rates for 
the selected risks. Significance is defined by the expert 
method. After identification of probable agricultural risks, 
the scenarios of their levelling or reduction and measures 
are selected. It is important to identify vulnerability to 
agricultural risk. Subsequently, mathematical information 
processing is carried out to identify potential losses for 
each identified agricultural risk and probable insurance 
premiums. However, the probable risks associated with 
the proposed range of insurance products and the level of 
their profitability are compared.

It is advisable to periodically update the risk map 
according to changes in internal factors and the 

external environment. The map should be improved 
along with the changes in agricultural production as 
new opportunities are generated with the expansion 
of opportunities, accordingly, the range of insurance 
products should be expanded and improved. 

To analyse the provision of the insurance benefit 
criterion for all participants, it is advisable to apply the 
following algorithm:

1. The largest and smallest values of the indicator are 
determined, if the utility is measured on a 100-point 
scale, utility values are ranked from 0 to 100.

2. Several standard values are determined, which are 
expertly ranked and determine utility values.

3. Average utility values are determined.
4. If there is a significant fluctuation of utility values 

then it is advisable to reconcile expert approaches to the 
range of utility values.

5. The integral utility is calculated using the regression 
function by calculating the least squares method.

Another key criterion for assessing the agricultural 
insurance system is the provision of insurance reserves. 
In general, insurance reserves include all components of 
insurance capital that can be oriented towards covering 
potential losses.

The search for methodological approaches to the 
analysis of the development of complex integrated 
economic systems convinces us of the inadequacy of 
exploiting only quantitative indicators, since they outline 
their state and functioning in past periods and, therefore, 
can’t serve as a basis for predicting future development 
prospects. At the same time, the calculation of purely 
quantitative indicators will distort the assessment of the 
agricultural insurance system. Therefore, it is important 
to exuberant the system of qualitative characteristics 
that allows outlining the dynamics of tendencies that 
are not subject to mathematical estimates but they can 
be considered valuable for assessing the development of 
the system of agricultural insurance.

To assess the quality of the development of the 
agricultural insurance system, the list of criteria should be 
developed and it is important to establish the “weight” of 
each block of quality criteria (Todosiychuk, 2016).

The main indicator of the quality of the development of 
the agricultural insurance system can be the indicator – Q, 
which should be determined using the modified method 
of the mean square deviation, which is calculated as the 
difference between the values of perception and the 
values of expectations with the simultaneous application 
of weight indices. The basis for such an assessment is the 
weighting of each criterion block:

Q k à àñ
і

ï

= −
=
∑ ( )0 2
1

,                                                           (1) 

where Q – an integral indicator of the development 
of the agricultural insurance system;

і – criterion of quality of development of the system 
of agricultural insurance;



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Vol. 5, No. 4, 2019
k – weight index of the relevant criterion block;
àî – the value of the quality of the criterion block by 

the level of expectation;
n – the number of criteria used to assess the 

development of the agricultural insurance system;
àñ  – the value of the quality of the criterion unit by 

the level of perception.
One of the tasks of the development of the system 

of agricultural insurance should be the harmonization 
of expectations of agricultural producers with the 
proposed range and quality of insurance products.

To assess the balance and accessibility criteria, it is 
expedient to assess the regional components of the 
agricultural insurance system according to the following 
scheme:
1) on the basis of forming a set of indicators of the 
functioning of the agricultural insurance system 
for insurance products and regions, to determine 
correlation dependencies, a variation of coefficients and 
to generalize to the integrated indicator;
2) to evaluate the regional components of the agricultural 
insurance system using one-factor and multi-factor 
dependencies with the inclusion of a multivariate 
assessment of internal and external factors of influence.

It is expedient to search for harmonious correlation of 
the interests of agricultural producers, insurers, and the 
state with schedules of collected premiums, amounts 
of compensated payments, uncompensated losses, the 
profitability of agricultural production, loss-making 
of agricultural insurance and parameters of insurance 
subsidy of insurance protection of agricultural producers. 
Harmony of the ratio of interests will be demonstrated 
by the criterion of the utility of agricultural insurance 
and determined by the formulas:

D = Dmax, in the situation: 
Rrel * V = Z>Rnorm;
F<Fmax; 
Wnorm = W<Wmax 
Where Rrel– the probability of reverse by the insured 

of guaranteed means higher than the standard (Rnorm);
V – amounts of damages to be paid to agricultural 

producers with a certain probability – Rrel;
Z – the amount of damage;
F – time slot during which losses will be recovered 

(Fmах);
D – the income of agricultural producers from 

insurance calculated as the difference between the 
reduction of uncompensated damages and the amounts 
of insurance premiums;

W – an integral indicator of the development of the 
system of agricultural insurance which includes a set 
of non-economic constraints harmonious balance of 
interests of all participants.

Integral assessment of the development of the 
agricultural insurance system is based on the blocks of 
indicators: homogeneity, balance, stability, profitability, 
loss-making, structuring, and risk-taking. Each block 

contains quantitative and high-quality parameters, 
coefficients, indices, indicators (Plakhtii, 2019).

Among the key indicators that should be used in the 
contour of the integrated assessment of the development 
of the agricultural insurance system, it is necessary to 
separate: the ratio of the amount of insurance premiums 
and agricultural GDP, the dynamics of the growth of 
assurer and insurers, the amount of insurance payments 
per one agricultural producer, the indicator of loss, the 
index of the severity of the consequences of natural 
disasters, the average amount of insurance indemnity, 
the ratio of reimbursed losses and the size of insurance 
premiums, the size of insurance premiums at the 
regional level.

The application of this integrated assessment of the 
development of the agricultural insurance system will 
make it possible to more closely identify the contour of 
the development of the agricultural insurance system 
and will serve as an information justification for the 
adoption of strategic decisions.

The matrix of the integrated assessment of the 
development of the agricultural insurance system on 
the platform of the modified main component has been 
constructed, which will facilitate the implementation of 
the curtailment of the output meters to form an integrated 
indicator and to disassociate the development of the 
regional components of the system (Kraybill, 1989).

A range of statistical indicators was selected that outline 
various aspects of the development of the agricultural 
insurance system and its regional components: X1 – 
the number of insurers in general and in the regional 
section; X 2  – receipt of insurance premiums, UAH 
for one insured person; X 3 – the amount of insurance 
indemnities, UAH for one insured person; X 4 – the size 
of insurance premiums, UAH for one insured person; 
X 5 – segment of insurance indemnity in insurance 

premiums, %, and X 6 – segment of insurance premiums 
directed to reinsurance, %.

An expedient procedure for the formation of an 
integral indicator is the unification of the selected output 
data, that is, the use of extrapolation with the use of 
which all of them will be calculated in the N-ball format. 
At the same time, the zero indicator will harmonize with 
the smallest level of development and the maximum 
number N – with the largest. Such unification guarantees 
the comparability of the built information array.

5. Findings
Unification is carried out according to different 

algorithms. This is due to the expediency of unifying the 
components for which the ranking is from the highest to 
the lowest.

For measuring instruments, the rise of which 
contributes to increasing the measure of agricultural 
insurance, the index of a certain unified variable is 
determined by the algorithm:



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x
x x

x x
Nij

ij j

j j

=
−

−

 

 

min

max min

                                                          (2)

Where xij – i index j of the output unified index Xj  
(i n= 1, , j m= 1, , n – the number of observations for 
the index Xj, m – the number of output values; xij – i 
index j output unsupported index X j; xj min – the lowest 
index j output unrestricted index X j; xj max – the highest 
index j source unregistered index X j.

For meters whose rains negatively regulate the 
development of agricultural insurance, the index of 
a certain unified variable is determined by the algorithm:

x
x x

x x
Nij

j ij

j j

=
−

−

 

 

max

max min

(3)

If the source index X j is linked to the aggregate integral 
index by nonmonotonic bonds (that is between xj min and 
xj max), there is a certain optimal index xjopt  at which the 

maximum rate of development is observed, the index of 
a certain unified index X j is determined by the algorithm:

x
x x

x x x x
ijopt

ij jopt

j jopt jopt j

= −
−

−( ) −( ){ }



1

 

   max ,max min









N    (4)

The definition of the integrated indicator Y is 
calculated by the algorithm:
Y w Xj

j

m

j=
=
∑
1

,                                                                         (5)

where wj – weight index, Xj – output values, m – the 
number of output values.

According to the definition of the modified main 
component by the algorithm (5) as a weight wj it is 
expedient to take the squares of the component j in 
a certain trajectory l1 of the matrix of the measuring 
instruments X1, X2, …, Xm.

When forming an integral indicator of the development 
of the agricultural insurance system in the country and in 
the regional section according to the algorithm (2.21), 
for comparison, weight indices wj were calculated at the 
same time according to another algorithm, namely, the 
dispersion segment D (Xj) of the value of Xj in the totality 
of the dispersion of all output indices:

w
D X

D X
j

j

j
j

m
=

=
∑

( )

( )
.

1

                                                                    (6)

The purpose of this assessment is to disassociate the 
laws and strategies of the development of the agricultural 
insurance system.

Such an assessment helps identify trends in the 
development of the agricultural insurance system and 
outlines the weaknesses of the system. The platform of 
the proposed methodological approach to assessing the 

development of the agricultural insurance system is a set 
of criterion characteristics and a balanced synthesis of 
selected meters (Schindler, 1994).

6. Conclusions
Insurance agricultural risk is defined as possible 

damage inflicted on a particular object of insurance 
due to its loss or damage as a result of the insured 
event specified in the insurance contract, calculated in 
the value equivalent but not greater than the specified 
amount of insurance. Such an interpretation of insurance 
agricultural risks has allowed developing a matrix of 
insurance and non-insurance agricultural risks that are 
inherent in agricultural production.

Methods of calculating the insurance premium for 
agricultural insurance require reliable, objective, long-
term data, which is possible when a system for collecting 
and processing statistical information on insurance 
incidents in agriculture is established (Aleskerova, 2015).

Nowadays, agricultural insurance procedures and 
technologies can’t be considered perfect because of the 
inadequate exploitation of progressive tools.

The mechanism of agricultural insurance – is the 
construction of methods, instruments, tools, and 
appropriate support. In this context, it is advisable to 
allocate the following components of the mechanism of 
agricultural insurance: 
1) subjects and objects of agricultural insurance; 
2) methods, levers, and instruments; 
3) income, expenses, and reserves; 
4) institutional and infrastructure component; 
5) informational and organizational support.

Components of the mechanism of agricultural 
insurance with varying intensity affect the development 
of both the system of agricultural insurance and its 
participants (Ransom, 2011).

The development of the agricultural insurance system is 
a complex and multi-faceted dynamic, which in a certain 
time interval can display progressive, regressive or stagnant 
characteristics, it is defined by the system of certain values 
and landmarks and it possesses the ability to change its 
composition, functions, components, subsystems.

The matrix of the integrated assessment of the 
development of the agricultural insurance system on 
the platform of the modified main component has been 
constructed, which will facilitate the implementation 
of the curtailment of the output meters to form an 
integrated indicator and to disassociate the development 
of the regional components of the system.

References:
Aleskerova, Yu., Mulyk, T., & Fedoryshyna L. (2018). Improving credit protection analysis methods Reports of 
main agricultural enterprises. Baltic Journal of Economic Studies, 4(2), 1–7. doi: 10.30525/2256-0742/2018-4-2-1-7
Aleskerova, Yu., & Fedoryshyna, L. (2018). Analysis of investment activities of enterprises of Ukraine. Economic 
system development trends: the experience of countries of Eastern Europe and prospects of Ukraine: monograph. 
Riga, Latvia: “Baltija Publishing”.



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Vol. 5, No. 4, 2019
Aleskerova, Yu., Fedoryshyna, L., & Koval, N. (2018). Features of loan security for the reproduction of fixed assets 
for agricultural purposes. Baltic Journal of Economic Studies, 4(4), 1–5. doi: 10.30525/2256-0742/2018-4-4-1-5
Aleskerova, Y. V. (2014). Governmental support to agricultural insurance in the countries of the world. Economic 
Sciences: theory and practice. Baku: Azerbaijan State University of Economics, 71(2), 31–41. 
Plakhtii, Т., Fedoryshyna, L., & Tomchuk, O. (2019). Socio-economic component of preferential taxation of 
individuals' incomes. Baltic Journal of Economic Studies, 5(2), 1–7.
Aleskerova, Yu., & Todosiychuk, V. (2016). Fiscal multipliers in Ukraine. Economy and management organization, 
4(24), 36 –43.
David Ransom (2011). IF1 – Insurance, Legal & Regulatory. Chartered Insurance Institute.
Donald, B. Kraybill (1989). The riddle of Amish culture.
Schindler, R . M. (1994). Consumer Motivation for Purchasing Low-Deductible Insurance. In Marketing and Public 
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