Pradhan Mantri Fasal Bima Yojana helped GIC Re double its growth

M SaraswathyMoneycontrolThe Pradhan Mantri Fasal Bima Yojana has doubled the growth for General Insurance Corporation of India (GIC Re).The reinsurer, which is among the five public sector insurers that have received Cabinet nod for listing, saw business growth touch 90 percent for H1 of FY17.Alice Vaidyan, chairman and managing director of GIC Re said that without crop insurance, they saw 40 percent growth in the first half of this fiscal. She added that they are now the largest agriculture reinsurer in the world due to the Fasal Bima Yojana.Insurers estimate that the government has put in about Rs 15,000-16,000 crore in the form of premium under the crop insurance scheme. Their infusion is expected to cross Rs 20,000 crore by the end of this financial year.More than 1 million farmers have been given cover under this scheme, making India the third largest agriculture insurance market in the world after US and China.The scheme, approved by the Cabinet in January 2016, has a uniform premium of two percent to be paid by farmers for all kharif crops and 1.5 percent for all rabi crops. For commercial and horticultural crops, the farmers’ premium is five percent. The rest of the premium is paid by the government.  In his Budget speech last year, Finance Minister Arun Jaitley had said the farmers will pay a nominal premium for the coverage. The weather departments also play a crucial role in mapping anomalies caused by excessive rain, hailstorm or flood so that crop damage can be minimised. It is expected that additional weather-based devices and satellites will also be utilised by the ministry and government. Overall, the insurance industry also expects crop insurance to become the major source of premium collection after the motor and health segment.