1. Expanding Weather Insurance to
Horticulture
• Devising the product
• Devising the product – our experience
• Selling to farmers- issues thrown up

2. Expanding Weather Insurance to
Horticulture
DEVISING THE PRODUCT
• Assumption: Agro-climatic conditions affect the
crop
• Need to identify the agro-climatic
vulnerabilities of the proposed crop
• Involving clients’ agronomists in devising
product specifications- farmers’ feedback
critical

3. Expanding Weather Insurance to
Horticulture
DEVISING THE PRODUCT
• Parameters can be varied covering various
phases of plant growth
- Excessive rainfall
- Deficient rainfall
- Excessive temperature
- Low temperature
-pest congenial climatic conditions

4. Expanding Weather Insurance to
Horticulture
DEVISING THE PRODUCT
• Identifying the triggers correctly
• DO NOT CHANGE THE TRIGGERS IN
ENSUING YEARS IF THERE WAS A LOSS
-erodes credibility of all agencies
- a proxy cover -therefore need to constantly
evaluate success of product by random
surveys of actual impact at farm level

5. Expanding Weather Insurance to
Horticulture
DEVISING THE PRODUCT- Our
experience
• AIC very receptive
• Willing to meet farmers’ requirement
• Seek volume and geographical spread
• Very concerned about adverse selection
• Display flexibility even in non weather based
products
• Concerns remain same which affects ability to
improve product and lower prices

6. Expanding Weather Insurance to
Horticulture
DEVISING THE PRODUCT- the farmers’
requirement
• Price
• Premium competing with input costs tendency
to ride out the risk without insurance
• In percentage terms premium is very high- as
high as 12 to 15% of the sum assured
• Insurers point of view- so are the risks and
claims

7. Expanding Weather Insurance to
Horticulture
Selling to farmers –issues thrown up
• Farming a gamble
• Proxy cover delinked from actual results
accentuates the gamble therefore need to
- involve them with weekly weather reports
- today totally distanced with no involvement
-No assurance that results are accurate
- Need for more weather stations
- Product features and price

8. Expanding Weather Insurance to
Horticulture
Selling to farmers –issues thrown up
Regulatory issues
• Cannot employ sub- brokers
• All sales employees must undergo 100 hours
mandatory training
• Institutes in large towns and cities only
• Fees Rs 10-15 K per employee add living
expenses and attrition

9. Expanding Weather Insurance to
Horticulture
Selling to farmers –issues thrown up
Issues not very different from New Pension
Scheme
- Incentive to sell is low
- Income potential does not warrant initial
expense
- Banks perhaps best suited to sell even to ‘non-
loanee’ farmers as part of fee based income
- Who fills in the gap on product features?
Corporations involved in contract farming &
NGOs.

10. Expanding Weather Insurance to
Horticulture
THANK YOU