Demand up for agri insurance productsDemand for agriculture-related insurance products is on the rise, as the government subsidy on the premium amount has worked as an incentive for those engaged in the agriculture sector to purchase these schemes.
Demand for agriculture-related insurance products is on the rise, as the government subsidy on the premium amount has worked as an incentive for those engaged in the agriculture sector to purchase these schemes.
Non-life insurance companies insured agricultural assets worth Rs6 billion in the last fiscal year that ended in mid-July, as against Rs3.2 billion recorded in fiscal year 2014-15, according to the latest data of the Insurance Board (IB), the insurance sector regulator. “Demand for agriculture-related insurance products is growing rapidly because the government is offering subsidy on premium of these insurance policies,” said IB Deputy Director Kundan Aryal.
The government currently offers subsidy equivalent to 75 percent of the premium amount.
In the last fiscal year, policyholders paid Rs276.7 million in premium, of which Rs207.5 million came in the form of subsidy from the government. In 2014-15, the premium collection hovered around Rs142.5 million.
Non-life insurers have been selling various agricultural insurance schemes since the introduction of the Crops, Livestock and Poultry Insurance Directive in January 2013. These schemes can be purchased by paying an annual premium equivalent to 5 to 6 percent of the sum insured. These schemes then provide protection to assets, such as crops, poultry, livestock and fisheries, against various risks, such as losses caused by diseases and natural disaster. Last fiscal year, the non-life insurance companies provided protection to livestock worth Rs4.7 billion, up 89 percent than in 2014-15. This amount makes up 78 percent of the agricultural assets insured by insurance companies last fiscal. These assets were insured by collecting a premium of Rs232.9 million.
The companies also insured poultry worth Rs564.4 million—a growth of 43 percent than in 2014-15. In the same year, crops worth Rs438.7 million were also insured, up 198 percent year-on-year. Also, fisheries worth Rs290 million were insured, as against Rs168.2 million in 2014-15.
Last year, the biggest chunk, or 29.41 percent, of the agricultural assets were insured by NLG Insurance, followed by Siddhartha Insurance (15.88 percent) and Shikhar Insurance (9.52 percent), show the IB data.