A large number of general insurers are considering to exit from crop insurance segment, reported Business Line. The decision, the report said, comes in view of the losses faced by the agriculture sector due to natural calamities.
The development comes after the government data revealed that the gross premium under Pradhan Mantri Fasal Bima Yojana (PMFBY) in FY19 is estimated to be Rs 20,923 crore, while the claims amounted to Rs 27,550 crore, said the report.
The situation, the report added, has forced most operatives in the sector to review their crop insurance portfolios. Further key players such as ICICI Lombard have already decided to exit from the segment under the Pradhan Mantri Fasal Bima Yojana (PMFBY) due to high reinsurance rates, said the report.
Further, the report added that the industry data suggest even Cholamandalam MS General Insurance too has made an exit from the segment, whereas state-owned re-insurer General Insurance Corporation of India (GIC) has also scaled down its crop insurance portfolio.
Interestingly, as per the report, gross direct premium income from crop insurance for all non-life insurers increased 26.5 percent to Rs19,217.65 in the first two quarters of the financial year, the report said. “Crop insurance has been doing reasonably well although a lot also depends on the districts with the insurer. The claims ratio has been high for some segments but most insurers remain bullish,” an industry source was quoted as saying in the report.