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Re­cent sta­tis­tics re­leased by the Gen­eral In­sur­ance Coun­cil of In­dia re­veal the extent of in­sur­ance pre­mi­um growth in the coun­try, and par­tic­u­larly in the agri­cul­ture sec­tor.

Agri­cul­tural in­sur­ance pre­mi­ums in­creased by 75 percent between April and Oc­to­ber this year, com­pared to the same pe­riod last year, fol­low­ing the launch of the Prad­han Mantri Fasal Bima Yo­jana (PMFBY) crop in­sur­ance scheme ear­lier in 2016 dur­ing the Kharif sea­son.

Pre­mi­ums col­lected for agri­cul­ture busi­ness rose to Rs 18,000 crore over the same pe­riod last year. This equates to just un­der USD $3 billion, mak­ing it the third largest agri­cul­tural insur­ance scheme in the world af­ter the U.S. (ap­proximately $9.75 billion in 2015) and China (ap­proximately $5.8 billion, of which 70 percent relates to crops).  Agriculture insurance premiums for India are now ahead of Japan, with premiums at approximately $1 billion.

market growth

The agri­cul­ture min­istry has also just an­nounced that 26.5% of farm­ers are now in­sured, an in­crease of 18.5% from the pre­vi­ous year. The agri­cul­tural area in­sured has in­creased by 15 percent. This compares to 23 percent of the agri­cul­tural area across the country being in­sured in 2014. The goal is to in­crease cov­er­age to over 50 percent of agri­cul­tural land.

Per­haps even more im­por­tantly – at least for the farm­ers who buy in­sur­ance – is that the to­tal sum in­sured has in­creased by 104 percent. In the pre­vi­ous in­sur­ance scheme, the sum in­sured cov­er­age was capped in or­der to min­imize pre­mi­ums. There­fore farm­ers who were in­sured could only re­cover a frac­tion of their losses. The new scheme pro­vides pre­mium sub­si­dies so that the sum in­sured can in­crease and farm­ers can re­coup all their losses when an event oc­curs.

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