The new operational guidelines issued by the government for the state-backed Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme has the potential to be a game changer, Dr Ashish Kumar Bhutani, CEO of the government's flagship scheme, has said.
“We have been able to position the PMFBY as the single most powerful and effective risk mitigation mechanism in the country,” he said in his opening address at the 5th Asia Agriculture Insurance conference in New Delhi on 20 September.
He mentioned that the government has recently done a review of the scheme and has come out with the new comprehensive guidelines. “Under the new guidelines, insurers will have to pay the correct claim amount to farmers in the shortest possible time, and advance the enrolment cut off dates and reduce the time taken by various stakeholders for data entry, reconciliation and approval of application and submission and approval of e-data,” said Dr Bhutani.
In order to make all stakeholders accountable, a performance ranking for insurers and the state government has been included and this will be put in the public domain and shared with all stakeholders.
In her keynote address, Mrs T L Alamelu, chairman and managing director of Agriculture Insurance Company, spoke about how agriculture is the lifeline of the Indian economy and agrarian distress can cause immense distress to farmers and affect the economy. “The introduction of PMFBY has opened up huge opportunities for insurers in India and this segment has the potential to challenge the motor insurance sector,” she said.
She called for the extensive use of technology in agriculture insurance from underwriting to claims payment. “Technology must be used in such a way that manual intervention becomes almost minimal,” she said.
She suggested the use of blockchain solutions to speed up the system and make it more transparent.
Dr Pramod Aggarwal, regional programme leader at the South Asia Regional Program for the CGIAR Research Program on Climate Change, Agriculture and Food Security (CCAFS), in his welcome address spoke of how countries from around the world were looking to learn from India’s crop insurance schemes. “Risks are increasing as a result of climate change and this will make insurance all the more relevant and demanding in the days ahead,” he said. He highlighted the need for insurers to adopt an innovative approach that is growth oriented.
Mr Vikas Wadhera, director of modelling and analytics at RMS and chairman of the conference, spoke of the critical role of agriculture insurance in protecting crop yields and farmers' interests. “The insurance and reinsurance sector must come out with solutions to help bridge the protection gap and help the interest of the farmers,” he said.
The two-day conference sponsored by RMS ended last Friday.