1.  CLAIMS REPORTED AND PAID FOR KHARIF 2016                                                                During kharif 2016 the averagepremium rates for PMFBY were very high compared to previous years. The averagepremium rate is 12.

6 percent. The farmers are expected to pay up to only 5% andremaining portion paid by the both central and state government. But for someregions insurance company charged much higher premium rates than averagepremium rates.

For example the maximum claims reported was in Maharashtrabecause the average premium rate was 40 percent as data collected byCSE.Similarily in Rajasthan the average premium rate was very much higher whichis about 80 percent and for Gujarat it is about 40 percent and more. Eventhough claims reported are higher in Maharashtra and Rajasthan but number ofclaims paid were less.

                                                 The main in this disadvantage in this schemeare insufficient investigation of agricultural fields and delay responses byinsurance company. Even farmers were in contact with the insurance companiesfor claim. The insurance company rejected the farmers claim by simple excuses.The payment of claim has to be done within 3 weeks of claims reported but theinsurance company delayed the claim for more than 2 months. Even after 2 monthsclaims were only partly paid for most states.                     Figure1 Claims reported and claims paid of PMFBY for kharif 2016                         Source:  Ministry of Agricultural and farmers’ welfare,April 2017. The graph is about claims reported and claims paid of puffycrop insurance availed by farmers of all states in India in 2016.The totalclaims reported is 5962.

1 crores and total claims paid is 1934.8.As shown inthe figure 1 the maximum claim reported is in the state of Maharashtra which isabout 1693.1.The states which have not participated in this scheme are Goa,Meghalaya, Tamilnadu, Tripura.

The maximum claim paid is in the state of Maharashtrawhich is about 1266.7.12 states have paid the claim successfully in this scheme.Even though claims reported is high in Maharashtra only 74 percent is paid out.Only in Karnataka the percentage of claim paid were 100 percent. Insurancecompany has paid only 32 percent of claims reported. The main reason for delayin payment of claim by the insurance company is due to delay in disbursement ofsubsidy by state and central government.

2. MARKETSHARE OF INSURANCE COMPANIES.In the PMFBY, insurance company can be both government andprivate sector. There are 10 private sectors are participating as insurancecompany for this scheme. The agriculture insurance company (AIC) is a publicsector company formed for the purpose of insurance coverage to farmers fromnatural disasters. The Agriculture Insurance Company (AIC) has leading marketshare in the insurance scheme of 16,694,324 number of farmers coveredand actuarial premium charged by the company is 12.42 percent and thisinsurance company covers more states compared to other insurance company. The UnitedIndia insurance company charged highest actuarial premium of 22.

11 percent andleast premium charged by New India at 6.51 percent. Highest claim is paid bythe TATA AIG of Rs.

11, 395.92 lakhs in Karnataka. And many private sectorinsurance company remains unpaid or on the process for payments in the manystates like Bihar, Telangana and so on.                        Figure 2: Market share of company during kharif 2016.

                        Source: Department ofAgriculture, cooperation and Farmers Welfare.         Thechart is about the market share of insurance companies in the scheme. And italso effectively discloses the number of farmers covered, area secured, suminsured and the premium rate of all insurance company.  The number of farmers insured by AIC are 16,694,324,area secured was 14,952,992(ha), sum insured Rs. 49, 00,640, gross premium is Rs.6, 08,655, average actual premium rate charged by insurance company is 12.42and market share is 38.

35%.           The number of farmers insured by BAJAJ is863,960, area secured was 950,034(ha), sum insured Rs. 5, 62,238, grosspremium is Rs. 57,759, average actual premium rate charged by insurance companyis 12.42 and market share is 38.35%.         The number of farmers insured by CholaMandapam is 1215,022, area secured was 680,689(ha), sum insured Rs.

3,57,532, and gross premium is Rs.  16,983,average actual premium  rate charged byinsurance company is 4.75 and market share is 1.07%.      The number of farmers insured by Futureare 1,358,904 area secured was 727,352(ha), sum insured Rs. 4,07,074,gross premium is Rs. 18,057, average actual premium  rate charged by insurance company is 4.

44 andmarket share is 1.14%.      The number of farmers insured by HDFC is 4,127,783,area secured was 4,352,793(ha), sum insured is Rs. 15, 43, 06, gross premium isRs. 267,983, average actual premium rate charged by insurance company is 17.37and market share is 16.89%.

      The number of farmers insured by ICICI is2,181,947, area secured was 2,876,673(ha), sum insured Rs. 12, 55,100,gross premium is Rs. 1, 27,389,   average actual premium rate charged byinsurance company is 10.15, and market share is 8.03.      The number of farmers insured by IFFCO is3,218,474, area secured was 2,961,746(ha), sum insured Rs. 9, 07,140, andgross premium is Rs.  1,16,130, averageactual premium  rate charged by insurancecompany is 12.

80,and market share is7.32%.The numberof farmers insured by New India is 5,811, area secured was 14,071 (ha),sum insured Rs. 4,620, and gross premium is Rs.  301, average actual premium  rate charged by insurance company is 6.51,andmarket share is 0.

02%.The numberof farmers insured by Reliance is 2,853,160, area secured was 2,833,736(ha),and sum insured Rs.  10, 91,128, grosspremium is Rs. 99469, average actual premium rate charged by insurance companyis 9.

12, and market share is 6.27%.The numberof farmers insured by SBI is 578,417, area secured was 475,357(ha), sum insuredRs. 2, 29,669, gross premium is Rs. 36,526, average actual premium rate chargedby insurance company is 15.

9, and market share is 2.3%.The numberof farmers insured by Tata is 815,025, area secured was 627,274(ha), suminsured Rs. 2, 92,555, gross premium is Rs. 42,203, average actual premium ratecharged by insurance company is 14.

43, and market share is 2.66%.The numberof farmers insured by United India is 3,750,833, area secured was4,905,842(ha), sum insured Rs.

6, 14,811, gross premium is Rs. 1, 35,960,average actual premium rate charged by insurance company is 22.11, and marketshare is 8.57%.The numberof farmers insured by United Compo is 949,252, area secured was 859,462(ha),and sum insured Rs.  4, 03,990, grosspremium is Rs.

59,495, average actual premium rate charged by insurance companyis 14.73, and market share is 3.75%.3. NO.

OFFARMERS BENEFITTED FOR KHARIF 2016.  There are manybenefits for farmers in PMFBY scheme offered by insurance companies.·        If claimed percentage of sum insured increasesmore than 35 percent than Government will provide the protection to theinsurance companies.·        During the crop season if loss occurs for thefarmers  then it will be compensated bythe Government (both central and concerned state government)In PMFBY farmers cannot ask for share of profits made by theinsurance company. Even if the insurance company makes huge profit it will beonly for the companies. During kharif 2016 the growth of crop insurance has beenhuge.

The gross premium is about 1.27 lakh core which much greater than theprevious years. Figure 3: No. of farmersbenefitted for kharif 2016.                                Source:  Ministry of Agriculture and Farmers welfare,April 2017.                                    The graphexplains about the numbers of farmers benefitted for the kharif 2016.

Only fewstates farmers are benefitted in large number i.e. Maharashtra, Madhya Pradeshand Uttar Pradesh. Manipur farmers benefitted fully out of 84000 farmers, 83500farmers are benefitted it expresses around 99.9 percent farmers are benefitted.As mentioned above many states did not participate in the scheme. The maximumprofits earned insurance company from Maharashtra around Rs.

2255.2 crore. Thisscheme helps in development of non-life insurance sector for the F.Y -2016-17and it earned around Rs.10, 000 crore as gross profit.  Only 11.

4 percent farmers are benefitted underthis scheme. Totally area insured by this scheme for kharif 2016 was 375.8lakhs (ha) and average actuarial premium collected by all states was 12.6%.Many states like Rajasthan were claims reported were high but the farmersbenefitted were only 10.5 percent.

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