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India - ICICI-Lombard exits crop insurance business

ICICI Lombard General Insurance has decided exit crop insurance under the Prime Minister Fasal Bima Yojana, citing high rates quoted by reinsurance companies. Crop insurance contributed 16% to the top-line private insurers and was the third largest business after motor insurance and health.

The company, in its results on Friday, said that its gross direct premium income for the first six months of FY20 fell 11.8% to Rs 6,440 crore from Rs 7,305 crore in the first half of FY19. If crop insurance were to be kept out, the company’s premium from all other segments were up 16.2% higher from Rs 5,495 crore last year.

“We made a conscious choice of not doing crop insurance as reinsurers have been hardening the rates for the last years claiming the claims experience is not favorable. There has been a reduction in the commissions paid by reinsurers which do not cover the cost,” said Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance.

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