The fattening pig price index insurance is a innovated product developed by Groupama AVIC Property Insurance Corp. This product compensates the farmers for their loss caused by price fluctuation in the market, and it can really defuse the risks of farmers .The main difference between this kind of insurance and the fattening pig insurance is that fattening pig insurance materialize the cost and compensate only the specific loss indicated of the farmers, however the fattening pig price index insurance makes the insurance company compensate the farmers’ loss when the price of pig is lower than certain index standard based on the cost. The pilot of fattening pig price index insurance has won the support of local government and farmers, and the pilot of small range in Sichuan province has been a great success. Now Beijing, Sichuan, Shaanxi and other provinces have all proposed to start this insurance business in order to ease the influence to the local economy brought by the price fluctuation in the market. The fattening pig price index insurance is a local policy-based insurance generally subsided by the city and county government.