Govt Allows State-Run General Insurers to Sell PM's Crop Insurance Schemes

Government has now allowed all the four public sector general insurers to participate in its ambitious farm insurance schemes -- the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Unified Package Insurance Scheme with potential of over $2.5 billion in premium collection. The government had kicked off the scheme on June 1 without involving any of the four public sector general insurers, who control almost 50 per cent of the market. 
 

Only 11 private sector players were allowed to participate as they have better experience in crop insurance schemes, an area which state-run companies were almost eschewing so far. The PMFBY has replaced the existing two crop insurance schemes -- the National Agricultural Insurance Scheme (NAIS) and the Modified NAIS. For Kharif crops, the premium charged would be up to 2 per cent of the sum insured, while for Rabi crops, the premium will be up to 1.5 per cent. We have been allowed to participate in these schemes. Now that Kharif crop season has already begun, we will participate in the Rabi season," the country's largest general insurer New India Assurance's Chairman G Srinivasan told PTI. Its peer National Insurance Company is also gearing up for the scheme. 
 

"We are getting ready to participate in the scheme. We are working with Agricultural Insurance Company (AIC) as they are providing us technical knowhow on the subject," its Chairman and Managing Director Sanath Kumar said. 

"I do believe that it will be a profitable venture as it has been priced on the basis of actuarial calculation which will ensure the insurers get the right price for providing cover," he said.