Crop insurance in India: Reaching the Unreached

Pramod Aggarwal CGIAR Program on Climate Change, Agriculture, and Food Security

Progress of Crop Insurance In India

0 5

10 15 20 25 30 35 40 45 50

1980 1985 1990 1995 2000 2005 2010 2015 Year

No of farmers, million Area covered, million ha Insured  farmers,  

 19%  

Uninsured  farmers,    81%  

Top 10 reasons for dissatisfaction in unsatisfied index-insured farmers*

26.8 29.8

33.8

37.3

44.3

45.3 53.3

56.5

56.5

80.8

0

20

40

60

80

100 Types of Risks Covered

Period of Risk Coverage

Time Delay in Claim Settlement

Explanation on WBCIS Policy

Quantum of Sum Assured

Responsiveness of Intermediary

Resolution of Queries

Mechanisms for Grievance Redress

Convenience in Enrollment

Location of Weather Station

*Source: AFC, GOI, 2011

Farmer’s main suggestions for improving crop insurance

•  Insurance literacy: Greater understanding of crop insurance programs

• Product design: easy to understand and site specific

• Site-specific data: weather, crop-cutting samples for yield loss assessment

*Source: AFC, GOI, 2011

•  Further standardization of products based on agronomic and statistical principles to support robust actuarial design and pricing: AEZ specific Atlas

Scaling out crop insurance in India Improved product design

• Bundling with other risk management initiatives such as drought/flood tolerant varieties, water management practices- climate smart villages

• Double trigger products

• Bundling with disaster relief/ management

Scaling out crop insurance in India Products for comprehensive risk management

Scaling out crop insurance in India Engaging farmers in product design and MRV

•  Huge penetration of smartphones/tablets

•  Rural service centres •  Online policies and

enrollment •  Crowd sourcing of farmers

practices and digital images of crops

•  Cloud computing of losses •  Continuous feedback to all

stakeholders •  Direct benefits transfer- 115

million bank accounts for poor in 6 months

•  Linkages with other schemes such as agro-advisories

Scaling out crop insurance in India ICT solutions

Scaling out index insurance in India Improved targeting

1 dot = 25000 ha Source: IMD gridded data 1981 to 2011

Summary Scaling-out crop insurance: Key actions

1.  Improved insurance literacy 2.  Comprehensive risk

management solutions: integrating insurance with other approaches

3.  Engaging farming communities in product designing and MRV

4.  ICT for scaling out, farmers participation, and for quick settlement of claims.