Cattle enterprise score scale in animal life insurance in Turkey: a study of validity and reliability

ABSTRACT Risks and uncertainties are prevalent in the livestock sector. In this context, animal life insurance plays a crucial role in risk management. This study aims to establish a measurement system that aids in the precise calculation of insurance premiums and compensation payments by evaluating enterprise success scores related to animal life insurance. The research focused on cattle livestock enterprises located in priority provinces across Türkiye, identified based on the animal life insurance rates of TARSIM (Agricultural Insurance Pool). Surveys were administered and the collected data underwent validity-reliability tests, as well as explanatory and confirmatory factor analyses. The analyses indicate that the overall enterprise score is influenced by various factors and that improvements in the scores of subfactors have a positive impact on livestock prices, as well as milk and carcass yields. Consequently, the established “Enterprise Score Scale in Animal Life Insurance” offers a more objective methodology for premium determination at the time of insurance inception and for compensation calculation following a loss. Incorporating this scale into TARSIM is considered a notable enhancement in achieving greater equity, transparency, and effectiveness in animal life insurance.