Mumbai:
After finalising settlement of around Rs 16,000 crore of insurance claims for the Kharif 2017, under Pradhan Mantri Fasal Bima Yojana (PMFBY), the government will be coming up with a set of new guidelines to make the system more efficient said,Ashish Bhutani, additional secretary,Minsitry of Agriculture & Farmers' Welfare, on Friday.
January 31, 2019 has been fixed as a deadline for settlement of claims from Kharif in 2017, said Bhutani, who was participating in a seminar on “Strategies for Sustainable agriculture insurance’’ organised by the GIC Re.
The new guidelines will be in various parts to incentivise the insurers to improve their services for the nation-wide scheme. It would include how to use the district-wise crop cutting data, he said.
According to Bhutani, for Kharif 2017, claims valued at Rs 19,000 crore were received by the non-life insurers under PMFBY and out of it, the general insurers will be completing payment of Rs16, 000 crore of claims.
“We have already settled Rs 11,000 crore out Rs 16,000 crore Out of the pending Rs 5000 crore, Rs 3,500 crore will be given to the farmers as part of settlement soon., said Bhutani, adding that the loss ratio in the scheme was 75 per cent in the 2016-17 and 90 per cent in the last fiscal..
The problem lies only with the remaining Rs 1500 crore of claims which are stuck as states like Bihar and Telangana have not paid their parts of premiums .The issue is being looked into, he said.
“We have made it clear that no insurer can quote below a certain rate. Sharing of data is also very essential so as to make the scheme more effective one,’’ he said.
In 2016-17, the Budget allocation was Rs 9,000 crore but Rs 12,000 crore were spent in the scheme. In the fiscal 2017-18, the Budget allocation was Rs 13,000 crore, but Rs 15,000 crore were spent on the PMFBY.
Maximum claims under PMFBY had come from Madhya Pradesh.
“We have settled claims worth Rs 5000 crore in MP in the last week. As on 20th June, MP has zero claims pending,’’ he said.
Alice Vaidyan, CMD, GIC Re,“said pricing for the risks is utmost concern for us. We emphasise of actuarial pricing based on actual data.’’
Low awareness continues to be the area of concern. Government is likely to increase the budget of the PMFBY to Rs 13,000 crore from Rs 10,000 in 2017-18, said Vaidyan.
India crop insurance market premium has grown enormously – from Rs 4,200 crore in 2015-16 it reached Rs 22,180 cr in 2016-17. In 2017-18, it grossed a premium of Rs 24,352 crore and for 2018-19, projected premium under crop insurance Rs 27,000 crore, said GIC Re.
In 2016-17, farmers covered in PMFBY stood at 5.73 crore. However, 2017-18, farmer enrolment saw a decline of 20 per cent, said GIC Re.
“However, despite fall in the 2017-18, we are committed to expand our coverage to 50 per cent. In 2016-17, coverage was at 30 per cent’’ said Bhutani.
GIC Re is the market leader leading 15 of 18 treaties in the domestic crop insurance market and writing premium of around Rs 12,000 crore in 2017-18 with a market share of 52 per cent. The state owned reinsurer expects 10 per cent growth in crop insurance business in 2018-19.