Agriculture and livestock insurance size hits Rs. 5.57 billion

Within three years of its implementation of Agriculture and Livestock Insurance, the sum assured of this product has hit Rs. 5.57 billion.

According to the recent statistics of the Insurance Board (IB), 16 non-life insurance companies had collected Rs. 261 million in premiums by the end of third quarter of the current Fiscal Year 2015/16 while the insurers received claims worth Rs. 101 million.

In terms of sum assured, livestock insurance has topped the list to Rs. 1.55 billion while assured sum of crops is Rs. 301 million, birds Rs. 482 million and fisheries Rs. 238 million.

The devastating earthquakes in April and May last year and Indian blockade caused a severe impact on the insurance industry too.

Despite this, the statistics of crops insurance are impressive.

Assured amount of crops insurance of first nine months of current fiscal year is Rs. 139 million and livestock insurance is Rs. 1.48 billion which was Rs. 146 million and Rs. 2.47 billion respectively last year.

But, birds and fisheries insurance nosedived in the current fiscal.

The assured sum of birds insurance is Rs. 87 million and fisheries insurance is Rs. 53 million this year against the sum of Rs. 393 million and Rs. 168 million respectively in the last fiscal.

IB chairman Prof. Dr. Fatta Bahadur KC informed that the agriculture and livestock insurance got momentum after the Board issued directives for the insurers which implied that they mandatorily design insurance products to address the areas specified by the regulator.

The Board has assigned three districts for each of the commercial insurer.

“The Board has been running publicity campaigns, including interactions with selected farmers. On the other hand, insurance companies are expanding their network,” said Dr. KC.

The IB conducted an interaction with farmers and other stakeholders in Banepa of Kavre on Friday.

Prakash Chandra Sapkota, a consultant associated with the IB, said that the agriculture and livestock insurance would further receive a fillip as there was increased awareness about the product.

Agriculture and livestock insurance was launched in January 2013 which facilitated the insurers to sell vegetable, fruits, cereals and livestock insurance products.

Crops insurance covers the production cost that a farmer invests till the crops or horticulture is harvested while livestock and poultry insurance were launched to provide coverage of domesticated animals and birds like buffalos, cows, goats, sheep, pigs, chickens and others.

Under the agriculture and livestock insurance framework, insurers and customers will bear 90 per cent and 10 per cent of the actual loss respectively.