Pradhan Mantri Fasal Bima Yojana (PMFBY) has witnessed an increase in claims from the farmers across the nation in 2018-19. The claims ratio of the General Insurance industry went up to 93% for the year ended March 2019 as against 85% in the last year, according to General Insurance Corporation of India (GIC re). This means farmers have claimed 93% (over Rs 25,110 crore) of the Rs 27,000 crore of the crop insurance portfolio under the scheme as against 85% (around Rs 20,400 crore) of around Rs 24,000 crore portfolio in the previous year. In the case of PMFBY, while the insurance companies charge the actuarial priced premium rate (APR), the farmer has to pay a maximum 2% premium for Kharif and 1.5% for Rabi crops and 5% for commercial/horticultural crops. The difference between actuarial premium rate and the rate of insurance charges payable by farmers is being treated as the normal premium subsidy, which will be shared equally by the Centre and states. This means as much as 98 percent of the premium is paid by central and state governments. S Tripathy, General Manager GIC said, “Our reinsurance portfolio is around half of the total crop business at Rs 13,500 crore. The crop insurance premium was more or less stable. During the year, there was a marginal rise of around one percent in premium”. There was a rise of 10-12 percent rise in crop insurance premium in the previous year. While most of the claims have come from states like Maharashtra, Tamil Nadu, and Karnataka, crop insurance penetration was less in northern states like Bihar and UP. GIC’s crop portfolio has come down from around 40 - 30 percent of its overall business as it wants to bring down the risk. According to GIC Chairman & MD Alice Vaidyan, India has become the third largest crop insurance market in the world after the US and China. The crop insurance market in the US is around $ 12 billion and China $ 7 billion while India’s market size is around $ 3.8 billion. Public sector GIC is planning to expand its crop business in the US and Canada. “We have an exposure of $ 10-12 million in the US crop insurance market. In China, we have $ 20-25 million in exposure. We would like to bring down our exposure in China,” Tripathi added. He said the delay in disbursals under crop insurance scheme has come down from 7-9 months to 2-3 months. The delay in disbursals happens when the state government delays payment of premium. “The situation has improved now,” he added. However, to reduce basis risk (i.e. mismatch in farmer expectations and payment from scheme) under PMFBY, localized losses (due to hailstorm, landslide and inundation) and post-harvest losses (due to cyclone/ cyclonic rains and unseasonal rain) are assessed on individual farm level survey basis. The PMFBY mandates compulsory coverage for all loanee farmers and non-loanee farmers too are encouraged. The scheme is open to all food and oilseeds crops and annual commercial/ horticultural crops for which past yield data is available and for which requisite number of Crop Cutting Experiments are conducted as part of the General Crop Estimation Survey (GCES). Source - https://krishijagran.com