India - Govt may create ‘de-risk pool’ for crop-cover claims settlement

26.09.2019 117 views
The government is looking to create a pool for claim settlement under its crop insurance scheme in order to diversify the risks for insurers — and to lower the cost of re-insurance. The measure is also intended to address the erroneous perception that insurers are profiting unduly from the crop insurance scheme. Insurers re-insure their crop portfolio, mostly with foreign companies; nearly 50 per cent of the crop re-insurance goes to global players. Typically, insurance players retain 25 per cent of the risk and premium, and hive off the rest to re-insurance companies. The creation of a pool for claim settlement under the Pradhan Mantri Fasal Bima Yojana (PMFBY) will likely redress a situation where a substantial portion of the surplus goes to re-insurers.

Joint settlement

Under the proposed pool, insurance companies will keep 25 per cent of the premium/risk (as they do now), and hive off the rest to the pool. Claims will be settled jointly by the insurance company and the pool in the ratio of the premium, that is 1:3. The pool will be managed by a pool manager/administrator, which will be a government entity. Premium rates will be fixed by a government-appointed technical committee, and any surplus generated will remain in the pool, and be invested. Such a model will likely help insurance players diversify their risk, and also lower reduce re-insurance costs (if the government opts to take a re-insurance cover for the pool in the initial years). The pool model of crop insurance works successfully in Spain and Turkey, and can work well for India, too, say experts. However, insurance regulator IRDAI has to first come up with guidelines and framework. Currently, listed companies in the general insurance space have been incurring loss in their crop insurance portfolio. Yet, the aggregate industry claims ratio (that is, incurred claims/premiums) is less than 100 per cent, which suggests insurance companies are registering a surplus.

Claims ratio

Indicatively, the claims ratio was 73.5 per cent in 2016-17, the first year of PMFBY. In 2017-18, it rose to 81 per cent. Insurers’ administration and re-insurance costs add up to 10-12 per cent, but the rest is their surplus. Farmers’ organisations and political parties had claimed that insurance companies were profiting at the expense of farmers. Yet, many insurers currently face a major risk, given their exposure to just two or three States, and their re-insurance cost is high. Sample these claim ratios across a few States in the past six crop seasons: in kharif 2016, the claim ratio 209 per cent in Kerala and 134 per cent in Karnataka. In rabi 2017, it was 286 per cent in Tamil Nadu and 172 per cent in Andhra Pradesh172 per cent. In kharif 2017, it was 451 per cent in Chhattisgarh; 269 per cent in Haryana; and 216 per cent in Odisha. In rabi 2018, it was 226 per cent in Odisha and 122 per cent in Tamil Nadu. In kharif 2018, it was 215 per cent in Himachal Pradesh; 120 per cent in Haryana; and 115 per cent in Uttarakhand. With the pool model, the high risk arising from a concentrated portfolio will likely be addressed. Source - https://www.thehindubusinessline.com
27.03.2024

Turkey - Climate change may affect grape cultivation

A recent study has highlighted the impact of the climate crisis on viticulture in Turkey, predicting that the expected rise in temperatures and reduced rainfall could shift the suitability of vineyard regions for grape production over the next three decades.

27.03.2024

Crop crisis reveals El Niño’s toll on Southern Africa

New findings from the El Niño-Southern Oscillation (Enso) reference group highlight the significant impact of the 2023/24 El Niño event on various aspects of climate and agriculture in Southern Africa.

27.03.2024

Philippines - Crop losses reach P80M as drought hits Negros Oriental

As the El Niño phenomenon worsens in Negros Oriental, damage to rice, corn, and other high-value crops has reached more than PHP80.4 million, the Department of Agriculture-Provincial Agriculture Technology Coordinating Office (DA-PATCO) said Tuesday.

27.03.2024

USA - Farmers say coverage has become unavailable or unaffordable as drought and floods increasingly threaten their crops

Farmers who grow fresh fruits and vegetables are often finding crop insurance prohibitively expensive — or even unavailable — as climate change escalates the likelihood of drought and floods capable of decimating harvests.

27.03.2024

India - Telangana Minister assures financial support for rain-affected farmers

Telangana Excise and Prohibition Minister Jupally Krishna Rao has assured the farmers that the government is committed to providing financial help to the cultivators whose crops were damaged due to unseasonal rains.

27.03.2024

Australia - Managing canola pests using beneficial insects, spiders and mites

Australian grain growers will benefit from improved pest management strategies with the commencement of two new research projects focusing on beneficial insects (beneficials) in canola.

27.03.2024

USA - Early blooms indicate strong fruit year if frost, freeze can be avoided

Warm temperatures in late February and early March have led fruit trees across Virginia to blossom early. Based on what growers are seeing, the number of blooms indicate at banner crop. However, there is a risk a portion of that crop could be wiped out by a freeze or frost.

27.03.2024

USA - As winters warm, Wisconsin fruit growers brace for the worst

On a cool, early spring morning in March, Liz Griffith stands among her apple trees, reaching to the very highest branches with a pole saw. Birds that have already returned north call to each other over the “snip snip” of shears, as Griffith and her staff prune through eight acres of apple trees on her orchard in Cottage Grove.

istanbul escort şişli escort tbilisi escort şişli escort şişli escort maslak escort istanbul escort beşiktaş escort taksim escort izmir escort ümraniye escort mecidiyeköy escort şişli escort taksim escort ümraniye escort kartal escort şirinevler escort maltepe escort istanbul escort ümraniye escort kadıköy escort vip escort mersin escort istanbul escorts ataköy escort avcılar escort beylikdüzü escort okmeydanı escort şişli escort tuzla escort işitme cihazı sex shop sex shop sex shop sex shop sex shop sex shop sex shop sex shop