Crop insurance drives general premiums past Rs 1 lakh crore 

A source in the industry said that crop insurance has contributed 40-45 percent to the entire general insurance industry The general insurance industry has crossed Rs 1 lakh crore in premiums backed by strong growth in the retail segments of motor and health insurance, said sources Further, the government's crop insurance scheme - Pradhan Mantri Fasal Bima Yojana - has also contributed a large portion of the premium collections, with a source in the industry saying that crop insurance has contributed 40-45 percent to the entire general insurance industry. The official figures for premium collection have not yet been released by the regulator. Crop insurance, according to the insurance industry, has seen the government has put in about Rs 20,000 crore in the form of premium. 

More than 1 million farmers have been given cover under this scheme, making India the third largest agriculture insurance market in the world after US and China. The scheme, approved by the Cabinet in January 2016, has a uniform premium of two percent to be paid by farmers for all kharif crops and 1.5 percent for all rabi crops. For commercial and horticultural crops, the farmers’ premium is 5 percent. The rest of the premium is paid by the government. Among the retail segments, third party motor insurance and health has seen double digit growth. The last few days of FY17 saw a fire sale of BS-III vehicles by auto companies which contributed to the sale of motor policies. 

Third party insurance is mandatory for all vehicles as per Motor Vehicles Act, 1988. Since the motor third party premiums have been revised from April 1, there was also a rush to either buy a policy or renew the existing policy under the old rates in the previous financial year. According to sources in the health insurance segment, standalone health insurers saw a higher growth backed by customer preferences to buy niche products from specialised companies operating in the space. Aditya Birla Health is the latest entrant to this segment and it started operations in the second half of the last financial year. Even the group health segment saw a marginal growth backed by more price discipline and lesser quantum of discounts being offered. Industry sources said that fire and engineering segment continues to suffer 

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