Vice President urges development of agri-insurance products

Vice President Hamid Ansari called upon insurance companies here today, to develop sustainable agri-insurance products to help rural India. Speaking at the concluding ceremony of the Insurance Institute of India's (III) diamond jubilee celebrations here, Ansari said, "It is necessary to protect farmers from the vagaries of nature and ensure that they are eligible to seek access to credit. The high suicide rate of farmers and subsequent social and economic impact on their families needs to be redressed".

Maharashtra Chief Minister Devendra Fadnavis, Insurance Institute of India President A K Roy, LIC Chairman S K Roy along with hundreds of insurance sector officers from across the country were present at the celebration. The Vice-President said that presently, crop insurance covers only about 12 percent of sown area, which in most cases have an adverse claims-to-premium ratio. He said that there are problems with both the design and delivery of crop insurance schemes and called for reducing premium rates to make insurance schemes attractive and affordable.

"Despite its growth, insurance penetration remains abysmally low. Insurance penetration or premium volume as ratio of the Gross Domestic Product (GDP), for the year 2012-13 stood at 3.96 percent, which is much below the world average of 6.3 percent," he said.Vice President said that the Government of India has created policies to promote financial inclusion and extend insurance cover to the poor through schemes like the Pradhan Mantri Jan Dhan Yojana, the Pradhanmantri Suraksha Bima Yojana and the Pradhanmantri Jeevan Jyoti Bima Yojana.

"Offtake for schemes has been encouraging, but beyond government action, current industry structures and economic models are not yet conducive to its large scale success. The main challenge is to encourage poor households to invest in insurance, as one among a menu of social protection instruments," he said.