With unseasonal rain and hailstorms, insurance claims have crossed Rs1,000 crore while Madhya Pradesh has topped the list followed by Rajasthan and the number is still counting. Insurers claim that they have incurred huge losses in their prospective business due to the damaged Rabi crops in the same period of the year.
The farmers in the country have suffered crop damage between February and April this year due to unexpected weather condition and unseasonal rain making their lives worse in many parts of the country.
“As of now, we have received a huge claim of over Rs1,000 crore from insurance companies who assess State-wise claims out of the damaged crops due to unseasonal rain. The number is still on the rise as the final data is yet to come and the actual claims could be much higher than what we expect in future,” sources in the Finance Ministry said.
States with varied degree of losses to Rabi crops in different affected areas are Maharashtra, Madhya Pradesh, Uttar Pradesh, Himachal Pradesh, Uttarakhand, Rajasthan and Bihar. “The actual losses on yield basis may be much higher since yield is affected by many other perils covered under the agricultural insurance schemes,” said sources.
Confirming the development Rajeev Chaudhary, General Manager, specialised crop insurer Agriculture Insurance Company (AIC), however, told The Pioneer, “We are currently busy assessing claims out of the damaged crops due to unseasonal rain. At present, we estimate the claims could be more than Rs 1,000 crore. As we are the leading crop insurers of the country, our data alone showed that estimated claims in all our schemes have gone up Rs 828 crore till date while Madhya Pradesh has topped the list at Rs 600 crore,” Chaudhary said.
AIC, being a leading player in the industry, runs three agricultural insurance schemes for the benefit of farmers — Modified National Agricultural Insurance Scheme (MNAIS), National Agricultural Insurance Scheme (NAIS) and Weather-Based Crop Insurance Scheme (WBCIS).WBCIS plays a vital role for farmers as insurers assuring proper claims on crop damage.
For AIC, Madhya Pradesh has topped the chart with a claim of Rs 600 crore followed by Rajasthan at Rs 100 crore in the settlement during 2014-15 in all schemes while the company’s gross premium is Rs 130 crore and Rs 55 crore for Madhya Pradesh and Rajasthan respectively. “As we dominate the agricultural insurance market of having 50 per cent claim share in all States and rest 50 per cent by 10 such small companies who together may bring in huge claims when final data comes for assessment,” said Chaudhary.
Asked if there was any time-frame for claim settlement, Chaudhary said, “We are awaiting complete data and will settle the cases at the earliest. We will take not more than a week for settlement after receiving the final data.” Uttar Pradesh may be one of the top claimants when it comes to crop insurance claims, Chaudhary said, adding AIC has exposure to only 13 districts in the Bundelkhand region and is anticipating claims valued more than Rs 25 crore from the State.
He said as per current data for Rabi crop claims, the company’s gross premium is Rs 385 crore and the company has to pay a claim of Rs 828 crore to the claimants of different States. AIC has already settled a total of Rs 5,167.58 crore in claims and underwritten Rs 2,750 crore in premium in 2014-15. The unseasonal rain, of course, has resulted in untold damage to crops in affected States making farmers’ life worse and driving them to suicide. To their relief, Prime Minister Narendra Modi recently announced a higher compensation for damaged crops and early settlement of claims.
Also, the Reserve Bank of India (RBI) has taken initiative in helping farmers via various schemes. last week the Central bank also hinted at a new scheme for interest subvention to farmers, which may come earlier than expected. “In the meanwhile, the earlier interest subvention scheme will continue till June 30,” the RBI had said.