Multivariate weighted premium principle for determining crop insurance premium

The objective of this paper is to calculate premium in crop insurance using MWPP (Multivariate Weighted Premium Principle). This premium principle integrate external risk factors to crop insurance premium such as economic risk and catastrophe risk. The external risk factors are different from internal factors which are the initial risks from the original crop premium. MWPP is the new crop premium that reweight historical loss data with external factors. Risk loading is calculated with transforming underlying risk by adding external factors. By choosing the right external factors, this premium principle has a relatively increasing risk loading.