Why firms love crop insurance more than farmers
-The Times of India
NEW DELHI: The government's ambitious crop insurance scheme has proved to be a jackpot for insurance companies last year, which collectively earned 85 per cent profit (after excluding administrative and reinsurance expenses) during the 2017-18 kharif season.
Kharif is an Indian cropping season which extends from July to October.
17 insurance firms (5 public and 12 private) empanelled under the Pradhan Mantri Fasal Bima Yojana (PMFBY) registered a margin of Rs 15,029 crore as they paid out claims of a mere Rs 2,767 crore against the Rs 17,796 crore collected as premium.
These companies have earned over 96 per cent profit under another crop insurance scheme—the Restructured Weather-Based Insurance Scheme—during kharif 2017-18 as they received Rs 1,694 crore as premium and paid out just Rs 69.93 crore as claim compensation.
The firms say, a good monsoon increased production, thereby reducing the claims and hence the profits.
Over 3.3 crore farmers bought crop insurance under PMFBY to insure 3.3 crore hectares of land during the kharif season of 2017-18.
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