The last fiscal year saw a drop in crop insurance premiums underwritten according to recently released figures, with four major insurers decreasing their involvement in the sector. Official data notes gross premiums fell 4.17% to Rs. 30,677 crore compared to the prior year’s Rs. 32,011 crore total, even as extreme weather events added difficulties for farmers.
Notably, state insurer Agriculture Insurance Company saw its premium income decline substantially by 32% year-over-year to Rs. 9,890 crore. This major decline was a key driver of the overall reduction. Another public sector firm also scaled back significantly. On the other hand, general insurers as a group witnessed growth of 19.5% to Rs. 20,786 crore, demonstrating mixed fortunes in the sector.
Though premium rates remained affordable for cultivators nationwide through government subsidies, several insurers appear to have reconsidered their risk exposure amid high claims. Unfortunately, this pullback comes at an unfortunate time as agricultural production faces mounting challenges from unseasonal precipitation, flooding and heat waves impacting yields.
Going forward, authorities are optimistic expanded enrollment methods can boost participation. For example, a new mobile application enables intermediaries to sign up non-borrowing farmers more conveniently. Over 70% of new applicants came through this channel recently, showing its promise to develop the critical risk management program further. Still, sustained commitment is needed across insurers both public and private to safeguard farmers’ livelihoods as climate threats escalate.
