Hyderabad-based Kshema General Insurance, the first company to receive a licence from Insurance Regulatory and Development Authority of India (Irdai) after a gap of five years in May this year, will be introducing products for farmers that protect them from losses caused by pest attacks.
A company official said that erratic and unpredictable climate conditions have led to pest attacks that hurt farmers’ income because of lower yield. Currently, the product is at the development stage and likely to be introduced next year after the approval from Irdai.
“We wish to offer pest insurance add-on cover to those who have currently opted for crop insurance,” Natraj Nukala, founder of Kshema General Insurance, told FE.
The company has started providing insurance to farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY) in the current kharif season in Uttarakhand, Himachal Pradesh and parts of Rajasthan and Puducherry.
It aims to achieve a premium income of Rs 1,000 crore by the end of FY24, its very first year of operation. It has received around `400 crore worth of premium so far with an operation spanning across 10 states.
“Through crop risk management products for farmers, we want to expand our operations to 22-25 states in the next couple of years,” Natraj said.
Besides, the new entrant to the agriculture insurance sector has introduced two products — Sukriti and Prakriti — for providing crop protections against hosts of issues, including damages occurring due to drought, landslide, cyclone, flood, earthquake, hailstorm and fire.
It has shortlisted about 100 crops, including fruits, vegetables, and spices, which are not covered under PMFBY, for coverage under Sukriti and Prakriti.
Kshema has bid for kharif crops under the PMFBY along with other insurers, including Agriculture Insurance Company of India, ICICI Lombard, Cholamandalam and Tata AIG General Insurance.
PMFBY, currently, covers all cereals, including rice, wheat, millets, pulses and oilseed crops.
Under PMFBY, the premium to be paid by farmers is fixed at just 1.5% of the sum insured for rabi crops and 2% for kharif crops, while it is 5% for cash crops. It’s optional for the farmers to go for PMFBY. The balance premium is equally shared amongst the Centre and states. In case of North-Eastern states, the premium is split between the Centre and the states in a 9:1 ratio.
The government has allocated `13,625 crore for implementation of PMFBY in 2023-24. Several insurance companies, both the public and private, are implementing the crop insurance scheme across 22 states.
