Agriculture Insurance Company of India (AIC) is set to expand its offerings with the introduction of insurance products for the livestock, aquaculture, and sericulture sectors. The company has already obtained the necessary license from the Insurance Regulatory and Development Authority of India (IRDAI), according to a statement made by a top AIC official on Wednesday.
Girija Subramanian, the CMD of AIC, revealed that the company secured the license for these new insurance products from IRDAI in May of the previous year. She further stated that AIC will launch the products after their development process is complete. Speaking to reporters at an ASSOCHAM event, she emphasized AIC's commitment to expanding its services and supporting various sectors within the agricultural industry.
Established in 2000, AIC boasts a capital base of Rs 200 crore. The capital is contributed by GIC Re at 35 percent, Nabard at 35 percent, and the remaining percentage by the four public general insurers, namely National Insurance, United India Insurance, New India Assurance, and Oriental Insurance.
Responding to queries about the need for additional capital, Girija Subramanian clarified that AIC does not require immediate capital infusion. However, the company will need to go through the bidding process to secure business under the PMFBY scheme. Additionally, AIC has obtained a license to provide retail crop insurance, which requires reaching out to farmers in remote areas. Developing this aspect of the business will take some time, she acknowledged.
Under the PMFBY scheme, farmers are required to contribute a certain percentage of the premium. For the kharif season, farmers pay 2.5 percent of the premium, while the remaining amount is split equally between the central and state governments. During the rabi season, farmers need to pay only 1.5 percent of the premium. Girija Subramanian added that AIC also participates in the tendering process for similar schemes initiated by state governments that do not follow the PMFBY guidelines.
As AIC prepares to launch insurance products for the livestock, aquaculture, and sericulture sectors, the company aims to extend its support to a wider range of agricultural activities. By diversifying its offerings and tapping into new markets, AIC is reinforcing its commitment to the farming community and bolstering the overall growth of the agricultural insurance sector in India.
