HIGH-RISK YIELD

General insurers are aggressively tapping into the new crop insurance business subsidised by the government for farmers, but the risk could be huge

There is a perception of widespread farm distress along with farmers’ suicides and calls for loan waivers across states. But the business of crop insurance has shown strong growth. On the face of it, all is hunky-dory. Farmers are getting crop coverage even though they pay a hugely subsidised premium of less than 2 per cent of the sum assured. General insurance companies, especially big players like ICICI Lombard, HDFC Ergo and Bajaj Allianz, are underwriting it without any fuss. And the centre, as well as the state governments, are happily contributing the lion’s share. The two-year-old scheme called Pradhan Mantri Fasal Bima Yojana ( PMFBY) has promised all this and more, looking like a win-win for everyone.