  This study estimates the risk contributions of individual European countries
regarding the indemnity payments in agricultural insurance. We model the total
risk exposure as an insurance portfolio where each country is unique in terms
of its risk characteristics. The data has been collected from the recent
surveys conducted by the European Commission and the World Bank. Farm
Accountancy Data Network is used as well. 22 out of 26 member states are
included in the study. The results suggest that the EuroMediterranean countries
are the major risk contributors. These countries not only have the highest
expected loss but also high volatility of indemnity payments. Nordic countries
have the lowest indemnity payments and risk exposure.
