System and method for evaluating risk associated with a crop insurance policy

A data processing system that evaluates the risk of insuring a grower based at least partially on a benchmark grower yield for a particular grower within the particular geographic area, where the benchmark grower yield is received from a yield sensor, mounted on a work vehicle to harvest a crop, that communicates over a communications network to the data processing system, the data processing system comprising:

• a communications interface, which supports communications over the communications network, that obtains the benchmark grower yield and a geographic area yield comprising, or derivable into, a mean geographic area yield of a crop for a particular geographic area for a corresponding time period;
• a data processor, an analyzer and an estimator comprising interactive components in the data processing system arranged to process data among the benchmark grower yield and the geographic area yield obtained by the communications interface;
• the analyzer that determines a difference between the mean geographic area yield and the benchmark grower yield;
• the estimator that estimates a variability parameter indicative of a variation in grower yield or the benchmark grower yield in the geographic area;
• and
• the data processor that determines forecasted grower yield, which deviates from at least one of the mean geographic area yield and the benchmark grower yield for the corresponding time period, based on the difference and the variability parameter, where a first result, of a county yield less the mean geographic area yield, is multiplied by the variability parameter to determine a second result that is added to the difference to determine the forecasted grower yield;
• where the data processor determines a risk indicator with reference to the forecasted grower yield, wherein the risk indicator is estimated from the following equation:
• {circumflex over (ε)}ict=yict−{circumflex over (α)}ic−{circumflex over (β)}icyct
• where {circumflex over (ε)} is a risk indicator, {circumflex over (α)}ic={circumflex over (δ)}ic+(1−βic)μc, {circumflex over (β)}ic is the variability of a field i within geographic area c, μc is the average or mean geographic area yield, δic is the difference between the mean geographic area yield and grower mean yield and yct is the county yield in time period t.