Crop insurance has emerged as the third-largest line of business for the insurance industry, after motor and health, contributing 16 per cent of its total general insurance premium of Rs.1,28,000 crore in FY17.
The share of crop insurance may increase further, as the Centre has increased the insurable crop coverage from 30 per cent to 40 per cent this year and is scheduled to increase it to 50 per cent in the next Budget.
However, while an increase in crop coverage and a subsequent rise in premium is music to the industry’s ears, assessing and settling claims is a highly complex and risky exercise. In the days of climate change, scattered rainfall and pest attacks, such risks are wider than in, say, motor insurance.
