1) The document discusses weather insurance products offered by two partner agencies, SEWA and Sajjatha Sangh, in the Kharif season of 2010. 2) It provides details of the insurance schemes such as triggers for payout, premium rates, and sums insured. SEWA offered a generic policy while Sajjatha Sangh focused on specific crops. 3) The document notes that while enrollment was high due to subsidies and low premiums, farmers' understanding of the insurance mechanisms and policy details was still poor. Average payouts received were much lower than expected, affecting future demand.

1. Weather insurance
/Rainfall
insurance
“An insured’s perspective”
Feedback from a project ….
Dr B S Suran, General Manager, NABARD

2. Background : perspective and possible
biases !!
 2 partners – Sajjatha sangh & SEWA
 Marginal differences in products
 ------------------------------------------
 Insured’s perspective or …. ??
One season
 Anecdotal and not research based

3. The partner agencies- products
agencies-
SEWA Sajjatha Sangh
Generic Crop specific
Deficit & excess RF Deficit RF
Multiple events- Excess Multiple event –
consecutive dry days
105 days 90 days
Market – Buy I get one ~50 % subsidy –
premium

4. sewa
Sajjatha sangh
Palmer index : is a soil moisture algorithm calibrated for relatively homogeneous regions. ( scales)

5. Partner agencies- Kharif 2010
agencies-
Particulars SEWA Sajjata Sangh
Policies issued 6384 5227 acres
Farmers covered 1775 4223
Villages/Blocks 60 42 blocks of 13
districts
Crops Generic Cotton, Paddy,
Maize and
Groundnut
Payout Average ` 78 Range of ` 13 to
2911
NABARD ` 9.50/ ` 4.78 ` 83.79/ ` 13.06
Sanction /release lakh lakh

6. SEWA
Some Observations
2006 2007 2008 2009 2010
company ICICI L IFFCO ICICI L AICI AICI
Crop any any any any any
Phases 3 1 1 3 5
1. Subsidy & low premium
Duration 110 92 90 143 117 facilitated enrollments
average premi 202
Sum assured
1485(14% )
76 190
1000(8%1000(19% )
)
150
1500(10%)
150
1500(10%)
2. More payouts – entices
WI policy Coverage
3. NABARD subsidy ensured
HH
enhanced coverage levels
Policies S 1775
4. Average pay out was Rs 78
… per policy
6384
5. 960 farmers out of 1775
received payouts
781
908 620
1081 1442
624
2006 2007 2008 2009 2010

7. MODEL AGRICULTURE INSURANCE VILLAGE:WEATHER BASED CROP INSURANCE SCHEME (KHARIF 2010)
TERM SHEET
State GUJ Distrcit: Sabarkantha Tehsil: Meghraj Village: Bhatkota
Crop: Cotton Reference Weather Station: Bhatkota Unit: PER HECTARE
DEFICIT RAINFALL
Rainy Day: A Day With Rainfall greater than 2.0 mm is considered as a rainy day .
PHASE - I PHASE - II PHASE - III PHASE - IV
PERIOD 1-Jul to 31-Jul 1-Aug to 31-Aug 1-Sep to 30-Sep 1-Oct to 15-Oct
Cover Index Sum Of Rainfall on Rainy Days
TRIGGER I (<) 100 mm 80 mm 40 mm 60 mm
TRIGGER II (<) 50 mm 40 mm 20 mm 30 mm
1 A. RAINFALL VOLUME
EXIT 10 10 5 0
RATE I (Rs./ mm) 10 8 10 0
RATE II (Rs./ mm) 25.00 22.67 53.33 0.0
Max. Payout (Rs.) 1500 1000 1000 0
TOTAL PAYOUT (Rs.) 3500
RAINFALL DISTRIBUTION PERIOD 1-Jul to 31-Aug
1 B. (Consecutive Dry TRIGGER DAYS (>=) 20 25 30
Days)(multiple Event) PAYOUT (Rs.) 800 1700 2500
TOTAL PAYOUT (Rs.) 2500
Note:Multiple event will be considered for final payout
TOTAL SUM INSURED (Rs.) 6000
PREMIUM (Rs.) + ST 500

8. MODEL AGRICULTURE INSURANCE VILLAGE:WEATHER BASED CROP INSURANCE SCHEME (KHARIF 2010)
TERM SHEET
State GUJ Distrcit: Sabarkantha Tehsil: Meghraj Village: Bhatkota
Crop: Generic crop Reference Weather Station: Bhatkota Unit: PER Acre
DEFICIT RAINFALL
Rainy Day: A Day With Rainfall greater than 1.0 mm is considered as a rainy day .
PHASE - I PHASE - II PHASE - III PHASE - IV
PERIOD 21-Jun to 15-Jul 16-Jul to 15-Aug 16-Aug to 30-Sep 1-Oct to 15-Oct
Cover Index Sum Of Rainfall on Rainy Days
TRIGGER I (<) 60 mm 80 mm 50 mm 60 mm
TRIGGER II (<) 30 mm 35 mm 25 mm 30 mm
1 A. RAINFALL VOLUME
EXIT 5 5 5 0
RATE I (Rs./ mm) 10 6 10 0
RATE II (Rs./ mm) 18.00 32.67 37.50 0.0
Max. Payout (Rs.) 750 1250 1000 0
TOTAL PAYOUT (Rs.) 3000
RAINFALL DISTRIBUTION PERIOD 1-Jul to 31-Aug
1 B. (Consecutive Dry TRIGGER DAYS (>=) 20 25 30
Days)(multiple Event) PAYOUT (Rs.) 500 1000 1500
TOTAL PAYOUT (Rs.) 1500
Note:Multiple event will be considered for final payout
PHASE - III PHASE - IV
PERIOD 1-Sep to 31-Oct 1-Nov to 30-Sep 1-Oct to 31-Oct
DAILY RAINFALL TRIGGER (>) 50 mm 150 mm 60 mm
EXCESS RAINFALL (Multiple
EXIT (mm) 100 mm 250 mm 120 mm
events)
Payout (Rs. / mm) 10.00 0 0
Max. Payout 500 0 0
TOTAL PAYOUT (Rs.) 500
TOTAL SUM INSURED (Rs.) 5000

9. Model Village – Bhatkhota !!
- Tribal community dominated
- AWS in the village
- Enrollment of all villagers
- Actual enrollment : 124/ 130 HH
-Volunteers for campaign
-Wage labour insurance – Loss of wages- low RF
-Weather/agro-advisory…as add-on !!
-Village level daily weather data
- In-season monitoring !!
-------------------------------------------------------
-All landed farmers + With Irrgn facility
- Seed production – all HH
- Adoption not as a risk mitigation tool…
- No knowledge of Insurance provider
- Pest seen as a major risk
- Made no distinction .- Crop / non Crop
- Relationship with partner helped
-Low premium attracts
- Moneyback guarantee & “ AWS demo for weather
mapping” did have positive effect

10. Poor understanding of rainfall
insurance mechanism and policy
details even among the adopted
A sub-optimal payout experience affects the
Farmers propensity to purchase rainfall
insurance in the subsequent periods.
85% reported the need for payouts
Avg. Payouts expected = Rs.6240
(Khambha).
Avg. Payouts Received = Rs 80!
67 % believed the product provided
optimal cover….study of 2009 by IGIDR

11. Conclusions
 Awareness matters (FL): Educated & financially
literate are significantly more likely to purchase rainfall
insurance…… !! BUT
 Peer following seen: many farmers unaware, seem to
join in because of peers
– Tendency to join triggered / enticed by low levels of
premium- subsidized by NABARD
– However, adoption could be influenced through information
campaigns
– Installation of visible tracking mechanisms do influence
decision making at the farmer level.
– Use of community leaders / volunteers helps in better
enrollment

12. Conclusions
 Traditional Marketing interventions may not work...
it is no sell and go product.
 But, selling by known NGOs ..helps in adoption
 Marketing : Moneyback guarantee along with
“demo” and “weather forecast” has a positive effect
 Crops grown & product availed …limited linkages .
 Communicating payouts transparently… ensures
interest in the product. Post sales service e.g.
disseminate likelihood of payouts…

13. Thank you for your time
Contact : ahmedabad@nabard.org
bs.suran@nabard.org