Lavanya R. Mundayur, CMD, Agriculture Insurance Company
Crop insurance isn’t just a business—it’s a developmental tool for the entire rural ecosystem. It demands long-term commitment, timely claim settlement, use of technology for risk management, and a deep understanding of rural India. Keeping the larger goal of building trust, access and affordability, remaining competitive is important in the crop insurance sector as well, Lavanya R Mundayur,CMD, Agriculture Insurance Company
New Delhi: State owned Agriculture Insurance Company(AIC) has settled total claims worth Rs 7,057 crore, benefiting over 1.12 crore farmers in FY 25, said Lavanya R. Mundayur, CMD of the company.
Maharashtra, Rajasthan and Madhya Pradesh are top three states in claim payment.
AIC, the country’s only monoline PSU insurer, dedicated to service the farmers, had issued over 5.80 crore insurance policies to the rural population across India and more than 3 crore policies were distributed through the “Meri Policy Mere Haath ((My Policy, In My Hand)” initiative. under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
The initiative focuses on increasing transparency and awareness among farmers by providing them with printed copies of their insurance policies. These policies detail coverage, premiums, and claim procedures, ensuring farmers have a clear understanding of their insurance benefits.
With a gross premium of Rs 9,742 crore, AIC has a bumper crop in terms of its financial results in FY 25.
It has a record underwriting profit of Rs 689 crore, in FY 25, highest ever in the Indian general insurance industry, with a combined operating ratio of 86.52 per cent, indicating effective management of operational costs relative to premiums earned.
Further, the company has an investment income Rs 1148cr in Fy 25 and has declared a dividend of Rs 50 crore for the year.
“The results for FY 2024-25 reflect a positive trajectory, showcasing AIC’s commitment to supporting India’s agricultural sector in the medium and long term as well. AIC’s continued focus on innovation and efficiency has not only strengthened its financial position but has also enhanced its ability to serve the farming community effectively,’’ stressed Mundayur.
AIC’s net worth has increased by almost 19 per cent to Rs. 8,280 crore in FY 25, reflecting a rise of Rs 1,318 crore from the previous year.The net worth growth rate had risen by 14.17% in FY 2023-24.
The company has a robust solvency margin of 4.07, well above regulatory requirements.
With over two decades of experience, a strong pan-India network, and deep domain expertise, AIC will continue to play a pivotal role in implementing flagship schemes like the PMFBY, assured Mundayur.
Crop insurance isn’t just a business—it’s a developmental tool for the entire rural ecosystem. It demands long-term commitment, timely claim settlement, use of technology for risk management, and a deep understanding of rural India. Keeping the larger goal of building trust, access and affordability, remaining competitive is important in the crop insurance sector as well, commented Mundayur.
“In 2024-25, there is just a two per cent reduction in overall premium as compared to previous year. PMFBY, being a three year cycle- tender based business, 2024-25 was the second year of the three- year tender cycle. Thus, business in the allotted districts remains largely unchanged. We have excellent growth in non scheme business, having doubled our premium from allied business like non-scheme crop, parametric, livestock etc,’’ explained AIC chief.
On the expansion plans for Fy2025-26, Mundayur outlined, “The current year being the third year of three -year tender cycle, the business from allotted districts is expected to remain more or less the same. However, a few states are expected to join the scheme in FY 2025-26, some others like Maharashtra are going for re-tender, which, could impact the gross premium.’’
On the criticism that the present PMFBY, based on ‘Cup and Cap’ model is flawed and only helps crop insurers to make money at the cost of farmers and state exchequers , Mundayur clarified that crop insurance is a volatile, high-risk portfolio.
“While some years may see lower claims, others witness catastrophic losses—like during droughts or floods—where payouts far exceed premium collections. The ‘Cup and Cap’ model was initially introduced to bring predictability and risk-sharing between insurers and the government in certain high risk areas. The Cap limits the insurer’s liability, while the Cup ensures a minimum premium income. This model protects both the exchequer and the insurers, ensuring continuity of protection in highly volatile sectors prone to frequent calamities,’’ spelt out Mundayur.
AIC has a net retention ratio of 50 per cent in FY 25, with the rest reinsured with multiple global reinsurers.