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TOLL FREE - 1800 103 5499
CALL US - 0124-4285499
SMS "CLAIM" to 56677
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Almost two thirds of our Indian population earns its livelihood from agriculture which in turn contributes 25% to the country's GDP. Any adversities faced by this sector therefore affect the economy as a whole. With such high stakes at hand, it is imperative that a risk mitigation plan be in place.
Weather Insurance seeks to overcome the shortcomings of Crop Insurance, namely
- delayed claim settlement (2-3 years)
- yield assessment a must at the end of policy/season
- sum insured compulsorily the loan amount taken by the farmer
Using Tokio Marine's expertise in the field weather insurance coupled with the obligation of our promoter IFFCO and it associates' need to protect the interest of its rural shareholders Barish Bima Yojana, ITGI's weather insurance policy, was launched. The product was introduced in 9 districts across 4 states (Karnataka, Gujarat, Maharashtra & A.P.) in April 2005. It is now spread across 105 districts across 7 Indian States and more than 1200 policies have been sold this financial year.
Dependence on monsoons is very high in India, as nearly 70% of India's cultivable land is rainfed. Lack of rainfall (drought) is therefore perceived as the single biggest problem. Weather Insurance seeks to insurance against financial losses arising out of adverse weather conditions.
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The product covers the anticipated deficiency in crop yield on account of rainfall deficiency. The policy period is operative during the monsoon months of June-Sept or July-Oct.
The cover is linked to deficiency in actual rainfall as compared to normal rainfall. This data for Actual and Normal rainfall is provided by the Indian Meteorological Department (IMD).
(IMD has rainfall measurement stations through out the country which collect rainfall data. These rain gauge stations are either IMD's own observatories or belong to various state and central government departments.)
Each district where the product is sold, a Primary weather station is chosen as the reference weather station. The rainfall of this station is used for the purposes of calculation of the rainfall indices under the policy. The station is chosen on the basis of presence of consistent historical rainfall data. An Alternate Weather Station is also chosen whose data can be used in case of missing data of Primary Station.
Weights are assigned to the monsoon season months according to the importance of rainfall vis-à-vis crop growth at different stages. E.g. Rainfall might be more important at the time of sowing crops than at the flowering stage so more weight is assigned to June (for a June - Sept Policy).
A claim Trigger is defined for each policy which is that least value of deviation in actual rainfall from the normal at which claims first become payable.
On the basis of Normal Rainfall (NR), Actual Rainfall (AR) and Weight figures, Weighted NR and Weighted AR figures computed for each month of the Policy cover.
Cumulative Weighted AR is compared to Cumulative Weighted NR figures
If deficiency percentage is equal to or greater than Claim Trigger, then claim starts becoming payable
The figures of actual rainfall under any specified station is obtained from the IMD/Other reliable sources on a regular basis. The insured does not have to keep a tab on the rainfall pattern or worry about rainfall data collection.
The deficiency and payout table are used to determine whether claim is payable or not.
| Salient Features of Barish Bima Yojna |
- The claims process is quick (within 3 months) and hassle free with minimal documentation and quick settlement.
- The policy administration is transparent with the source of all information being the IMD which is India's premier weather agency and is not open to any manipulation.
- The farmer has the flexibility to choose the sum insured based on his premium paying capacity.
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