Farmers will get compensated if rains are less than normal.
Ahmedabad, March 17
IFFCO-TOKIO General Insurance Company is set to launch `Barish Bima', a weather-derived insurance product that would compensate farmers if rains fall short of normal.
Iffco-Tokio has already carried out pilot projects in different parts of the country and is commercially launching the product later this week, industry sources said.
The company would issue a weather-derived cover based on the average rainfall in a particular district.
Claims would automatically get generated and the farmer would get compensated if rains fall short of the normal, an industry source said.
"The farmer would get his claim even if there is no crop damage due to moisture stress," the source said.
The product, for which clearance was taken from the Insurance Regulatory and Development Authority (IRDA) last year, has been derived from a similar product on Tokio Marine and Fire Insurance Company's portfolio in Japan.
When contacted, a senior Iffco-Tokio official confirmed that the weather cover would be launched soon.
Insurance products covering certain plantation crops such as coffee and tea were available in the market, but there was no single policy covering all types of crops.
"We had carried out pilots of the Barish Bima scheme n different parts of the country and received good response, especially from Rajkot and Amreli districts of Gujarat. We are now launching it across the country," the official told Business Line on Thursday.
Farmers' cooperatives or individual agriculturists with more than 10 acres of land can buy the insurance product, he said, adding that the cover would be available to all crops starting this kharif season.
Interestingly, Gujarat Heavy Chemicals Ltd (GHCL) recently became the first Indian company to take a weather insurance product, although to cover the exact opposite risk.
As per the insurance policy structured for GHCL by ICICI Lombard General Insurance, the company would get compensation if rains disrupt salt production in its fields at Nagapattinam in Tamil Nadu.
Meanwhile, the Iffco-Tokio official said Barish Bima was the company's second product for farmers.
The company already has a personal accident cover for farmers called `Sankat Haran' policy.