Financial Daily from THE HINDU group of publications
Tuesday, Jun 15, 2004
Financial Daily from THE HINDU group of publications Tuesday, Jun 15, 2004 |
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Money & Banking
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General Insurance Agri-Biz & Commodities - Horticulture/Fruits & Vegetables ICICI Lombard weather cover for orange growers Our Bureau
Hyderabad , June 14 ICICI Lombard General Insurance, in association with the Government of Rajasthan, has announced the launch of a comprehensive weather insurance scheme for the farmers growing oranges, to compensate them for losses due to deficit rainfall. ICICI Lombard is the first insurance company in the country to get approval from the Insurance Regulatory and Development Authority (IRDA) to launch weather-linked insurance products. In a press release, the insurance major said orange cultivation was subject two principal weather perils — unavailability of effective shower for initiation of flowering and dry spell during flowering. Orange trees require an effective shower of at least 60 mm of rainfall on any three consecutive days to initiate flowering. According to ICICI Lombard, the insurance cover starts from June 15 and would be effective till July 30. Orange trees area vulnerable to dry spells during the flowering period. According to the insurance company, it was observed that a dry spell of 10 to 15 days could lead to flower drop and consequent yield loss. The most critical period is July to September. Accordingly, ICICI Lombard has decided to offer the cover for this peril from July 1 and last till September 28, both days inclusive. The insurance company said discounts on insurance cover would be applicable only to those farmers who were availing themselves of insurance without subsidy. Commenting on the product, ICICI Lombard Chief Executive Officer and Managing Director, Mr Sandeep Bakhshi, said: "Weather insurance does not suffer from the usual moral hazard and adverse selection and high administrative costs of traditional crop insurance, and it is therefore better suited even to small farmers in rainfall-dependent countries such as India."
More Stories on : General Insurance | Horticulture/Fruits & Vegetables | Climate & Weather
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