In the fiscal year 2024 (FY 2024), India’s general insurers have scaled back their participation in crop insurance under the Pradhan Mantri Fasal Bima Yojana (PMFBY), despite government efforts to bolster agricultural coverage, reports the Indian Express.
The gross direct premium underwritten by insurers saw a notable decline of 4.2%. This contrasts with the previous fiscal year (FY 2023), which had witnessed an 8.7% increase in crop insurance premiums underwritten, reflecting losses due to floods, unseasonal rains, and heatwaves.
A significant factor in the reduction is the Agriculture Insurance Company‘s (AIC) 32% decrease in premium income, from Rs 14,619 crore to Rs 9,890 crore. AIC, along with New India Assurance, Oriental Insurance, and SBI General, all reduced their exposure to crop insurance in FY 2024. Notably, AIC disbursed Rs 12,353 crore in claims under the PMFBY during this period.
In contrast, overall premium income for general insurers rose by 19.5%, reaching Rs 20,786 crore. However, eight general insurers opted out of crop insurance entirely in FY 2024.
PMFBY, designed to cover nearly 4 crore farmers and over 50 crops, aims to integrate multiple stakeholders onto a unified platform. The scheme mandates coverage for loanee farmers and offers voluntary participation for others.
To enhance coverage, the Ministry of Agriculture and Farmer Welfare launched the AIDE app for intermediary enrollment, successfully engaging insurance brokers and enrolling 71% of farmers through Point of Salespersons (PoSPs). The Ministry emphasized the potential of the extensive PoSP network to increase enrollments among non-loanee farmers and improve access to retail insurance products.
This shift in insurer strategy amidst varying premium trends underscores ongoing challenges in achieving comprehensive crop insurance coverage despite concerted governmental initiatives.
