Pradhan Mantri Fasal Bima Yojana (PMFBY) played a significant role in the growth of non-life insurance industry in the financial year 2016-17. Gross direct premium of general insurance companies grew 32% to Rs 1.27 lakh crore in FY17. Senior officials in industry estimate that premiums worth around `20,000-22,000 crore would have been collected through crop insurance in the just-concluded financial year.
Insurance industry officials also believe that the 32% growth was largely due to the success of crop insurance. “Since past few years, health and motor insurance were largest contributors to the growth of the non-life insurance industry. But in the last financial year itself when crop insurance was introduced its share as a category in non-life industry has surged to 15-18%,” said a senior person from the insurance industry.
He added that crop insurance comes third in terms of premium received after motor and health insurance.
Data from Insurance Regulatory and Development Authority of India (Irdai) also shows that specialised players like Agriculture Insurance Company of India (AIC) saw their premium growth of 100% in the last financial year. Senior officials in the insurance industry say that crop industry is likely to get premium of over `30,000 crore in the current financial year.
The scheme, approved by the Cabinet in January 2016 has a uniform premium of 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. For commercial and horticultural crops, the farmers’ premium is 5%. The rest of the premium is paid by the government.
Sanjay Datta, chief underwriting, and claims at ICICI Lombard General Insurance, said: “We were one of the few early players in the crop insurance segment and now its almost 10% of our total premium. We believe that crop insurance segment will grow by 10-15% in the current fiscal.” ICICI Lombard General Insurance is present in states like West Bengal, Madhya Pradesh and Odisha among others.
The data from Irdai also showed that 18 private sector general insurers saw their gross direct premium at `53,662.95 crore up by 35.16% in last financial year. While four public sector insurers grew slower than private insurers at 24.46% getting gross direct premium of `59,357.92 crore in 2016-17. However four public sector insurers continued their dominant position with market share of 46.66% as compared to 42.18% of private insurers as on March 2017.
Players in the industry say that in the current financial year they might cross 1.5 lakh crore in premiums and growth would continue to come from segments like motor, health and crop insurance.