Crop insurance dwindles in FY 2024, top 4 insurance cut exposure

Gross direct premium underwritten by insurers fell 4.2%.

In fiscal year 2024 (FY 2024), India’s general insurers reduced their exposure to crop insurance due to the Pradhan Mantri Fasal Bima Yojana (PMFBY), despite the government’s efforts to bolster coverage in the farming industry, reported the Indian Express.

Thanks to crop losses from floods and unseasonal rains and heatwaves, the gross direct premium underwritten by insurers fell 4.2%, whilst crop insurance premium underwritten climbed 8.7% in the previous year (FY 2023).

The decrease is largely attributed to a 32% drop in premium income by the Agriculture Insurance Company (AIC), from Rs 14,619 crore to Rs 9,890 crore. 

AIC, along with New India Assurance, Oriental Insurance, and SBI General, all reduced their crop insurance exposure in FY24. Notably, AIC paid Rs 12,353 crore in claims under PMFBY during the year.

In contrast, general insurers overall saw a 19.5% rise in premium income, reaching Rs 20,786 crore. However, eight general insurers abstained from crop insurance in FY24.

PMFBY, covering nearly 4 crore farmers and over 50 crops, integrates multiple stakeholders on a single platform. 

The scheme is compulsory for loanee farmers and voluntary for others. 

To enhance coverage, the Ministry of Agriculture and Farmer Welfare launched the AIDE app for intermediary enrolment, successfully engaging insurance brokers and enrolling 71% of farmers through Point of Salespersons (PoSPs).

The Ministry highlighted the potential of the extensive PoSP network to boost non-loanee farmer enrolments and expand access to retail insurance products.