Making Agriculture Insurance Work for Indian
Farmer – Way Forward
ANUJ KUMBHAT
DIRECTOR
INDIA HEADQUARTERS
NORTH AMERI CA
GLOBAL RESEARCH CENTER
G 31 Quest Of fices
DLF Golf Course Road
Gurgaon 122 002 India
350 Fif th Avenue
59 th Floor, New York City
NY 10118 USA
SIDBI Innovation Center
Indian Institute of Technology
Kanpur 208 016 India
We are a global risk management company innovating
with Big Data, Analytics, Smart Devices & Financial
Services for clients around the world
Founded
Global Team
Investors
Footprint
2004
150 scientists,
engineers & mavericks
ILO / SIDBI / IIT
Ford Foundation
Pan India &
Global
Asia
Africa
Philippines
Bangladesh
Cambodia
Sri Lanka
Tanzania
Rwanda
Zambia
Mozambique
Latin America
EXISTING PRESENCE
BUILDING PRESENCE
United States
Mexico
Colombia
our vision is to secure smiles® for all of us using
pioneering new analysis, technology and innovation to
provide security against climate change
1
2
Weather
Insurance
 India
 Global
Big Data Services &
Analytics
 Agri Information Systems
 Weather Forecasting
 Remote Sensing
3
Smart Devices &
Technology
 Automated Weather Stations
 Vehicle Tracking Systems
 Energy Efficiency Devices
We are a global Risk Management company delivering
innovative products and services to large enterprises as well
as farmers in the remotest of villages worldwide.
Designed
Weather
Insurance
Contract for
Basix
Launched First
Germination
Failure Weather
Insurance
2004
2003
2007
2005
Worked with AIC
to Launch Sukha
Suraksha Kavach
Advised Govt of
India on WBCIS
Reforms in 2007
Designed First
Index Insurance
cover for small
Salt producers
2009
2007
Launched first Index
Insurance product for
Potato Farmers
Expansion of Products
& Services to Africa &
ASEAN
2011
2010
Launched Ford
Foundation
funded CARM
Program
2015
2012
Launched second
CARM Program
funded by ILO
Crop Insurance Experience
Bangladesh / Srilanka
• Working in Government funded project to Launch Index
Insurance for Smallholder Farmers
Mozambique /
Tanzania
• Worked with Cotton Institute to do understand risk
management needs of farmers on the basis of their size
Cambodia
• Helped leading insurer in the country to Launch first Crop
Insurance Product in Cambodia
South Africa / USA
• Developing Index Insurance Solution for Large Corn
Growers
New Zealand /
Mexico
• Pasture Index Insurance product for Dairy Farmers
Indian Farmer from the Perspective of
Agriculture Insurance
He wants
PA / House
/ Health
with Crop
He wants
MNAIS
He wants
WBCIS
INDIAN
FARMER
He wants
Revenue
Cover
He wants a
AWS in
every
village
While Understanding of Farmers’ Risk is
varying….Solutions aren’t Tailor-made
• WBCIS is disassociated with actual farm losses
• MNAIS doesn’t account for actual farm yields
• Less than 10% of required experiments are actually done
• Farmers better managing their risk can’t have
insurance at lower premium
• Spatial distribution of Stations is Population
dependent not area dependent
Some Anecdotal Experiences
Mehsana, Gujarat
• While trying to sell
Weather Insurance
• Farmer told us they are
smartly managing
weather risk
• But they have major
crop damages coming
from Four Legged
Terrors
• Losses are very area
specific
Some Anecdotal Experiences
Thakurmunda, Odisha
• Sustenance Farmer in
Thakurmunda, Odisha
• Owns half acre of Land
• Can’t pay premium for
WBCIS / NAIS even at the
subsidized level
• Is exposed to calamity
level risk that deprives
him of food
• Wants very quick relief
incase of Loss
Some Anecdotal Experiences
Karnal, Haryana
• Large Polyhouse Farmer
• Makes Rs. 500,000 in a
season
• Is not exposed to any
major risks
• However needs better
farm advisory & Yield
Management
Structuring Agriculture Risk
Management Solution
• Not all the risks can be solved through Insurance
solution
• Of what can be insured needs to address specific needs
of the farmer
• Varies with Farmer profile, Location and Crop
• Farmer can’t envision calamity level risk (return period >
10) easily unless there was a recent event
• But they are exposed to the risk
• Not willing to pay for it unless it is very small sum of Money
Yield
Possible Risk Management Structure
20%
Farmer Risk Retention: Risk Retention by farmer
50%
Customized Insurance / Non-Insurance Solution:
Idiosyncratic Risks - Designed to cover farmer’s
perceived risks - Subsidy based on the capacity to pay
30%
Safety Nets: Designed for widespread calamity Relief –
Highly Correlated over large area – Highly Subsidized
(say 90%) – Mandatory!
Safety Nets
• Jan Bima for Calamity Relief
• Can offer a Rs. 5000 / 10,000 cover for Rs. 25 (farmer’s
share)
• Part of Calamity funds can be routed through this
• Settlement Basis
• AWS installation keeping in mind Spatial Risk at Calamity
Level
• Outreach
• Through NGO, Bank or Postoffice
• Small farmer can be persuaded to open Jan-dhan account
• Claim Payment
• Claims Calculation within 3 days of calamity
• Direct Transfer of Claims in Farmer account with 7 to 10 days
of Calamity
R I S K S I N M O D E R N FA R M I N G
Representative Case Study
Yield Guarantee
Polyhouse in Haryana
In a live project underway we are engaged with a farmers group in
Haryana invested in Poly-Houses covering multiple acres of land to help
recover investments against pests and disease
 The accufarm® methodology involved detailed profiling of the ecosystem –
the polyhouse structure, weather, soil and PoP as well as a plan for soil
treatment and pest metering across the farm supported by constant
vigilance using pheromone traps and mobile cameras.
 We used disease forecasting models along with WRF generated forecasts at
9 km2 providing for immediate control in case of disease forecasts or
observation.
 We could guarantee compensation for yield loss
example: < 30 tons / acre for Cucumber
 Residual Risks like Hail Damage to Polyhouse and Inundation due to
Excessive Rainfall are covered through Index Insurance
 Price = Expected Cost of Pest & Disease control + Weather Insurance
The enterprise incurred heavy losses in the previous season of
Capsicum due to White Flies - a vector of leaf curl disease.
An automatic weather
Pheromone & Sticky Traps to
station to measure optimum watch economic threshold
weather conditions
level for pests
Observation of sucking pests
through Sticky yellow traps
Immediate measures to check
the infestation.
Downy Mildew Symptoms
Weekly Cropof
Observation
Checkup
suckingfor
pests
pest & Immediate
Advice onmeasures
Polyhouse
to check
throughand
disease
Sticky
nutrient
yellowdeficiency
traps
the
Maintenance
infestation.
How People Public & Private can
achieve this?
Govt can
Suggest Right
Financial
Support
Farmer
Organization can
ask right
Questions to
farmers
Insurance
Companies can
offer right
answers
: advanced weather risk management platform for global
insurers, reinsurers and agricultural businesses
THANK YOU
ANUJ KUMBHAT
DIRECTOR
INDIA HEADQUARTERS
NORTH AMERI CA
GLOBAL RESEARCH CENTER
G 31 Quest Of fices
DLF Golf Course Road
Gurgaon 122 002 India
350 Fif th Avenue
59 th Floor, New York City
NY 10118 USA
SIDBI Innovation Center
Indian Institute of Technology
Kanpur 208 016 India