Agriculture Insurance Company of India (AIC), currently holding a 50 percent market share in crop insurance under the Pradhan Mantri Fasal Bimal Yojana (PMFBY) scheme, is expanding its portfolio. A top official from AIC announced that the company has obtained the necessary license from the Insurance Regulatory and Development Authority of India (IRDAI) to introduce insurance products for the livestock, aquaculture, and sericulture sectors.
Girija Subramanian, the CMD of AIC, disclosed that the license for these new insurance products was secured in May of the previous year. AIC is currently in the development phase of these products and plans to launch them once the process is complete. Speaking at an ASSOCHAM event, Subramanian highlighted AIC’s commitment to extending its services to support various sectors within the agricultural industry.
Established in 2000 with a capital base of Rs 200 crore, AIC’s capital contributions come from GIC Re at 35 percent, Nabard at 35 percent, and the remaining percentage from four public general insurers: National Insurance, United India Insurance, New India Assurance, and Oriental Insurance.
Addressing queries about capital needs, Subramanian clarified that AIC does not require an immediate capital infusion. However, the company will undergo the bidding process to secure business under the PMFBY scheme. Additionally, AIC has obtained a license for retail crop insurance, a segment that involves reaching farmers in remote areas. Developing this aspect of the business is expected to take some time.
Under the PMFBY scheme, farmers contribute a percentage of the premium, with 2.5 percent during the kharif season and 1.5 percent during the rabi season. The remaining premium is evenly split between the central and state governments. Subramanian noted that AIC actively participates in tendering processes for similar schemes initiated by state governments not adhering to PMFBY guidelines.
