Unique offering to safeguard income offsets caused due to weather vagaries.

ICICI Lombard General Insurance Company, the leading private sector general insurance company offers a comprehensive weather insurance cover for farmers to protect their income in the event of adverse weather conditions impacting their yield.

ICICI Lombard’s Weather Insurance ensures cultivators from fluctuations in weather conditions like the intensity, spread of rainfall and temperature throughout the year. This weather insurance scheme compensates the farmer on the basis of weather data provided by independent third party weather stations managed by IMD and such other agencies.

The procedure for claim processing is non-cumbersome and scientific. Farmers do not have to file claims or go through any surveys for getting the claim amounts. The payouts are directly delivered to the farmer based on the data from the weather station and on the agreed compensation formula. The weather data is regularly collected by ICICI Lombard during the policy period and submitted to a professional weather data-cleaning & enhancing agency for verification. ICICI Lombard computes the claim amounts and the payments are made to the insured within 30 days after the cover period.

Weather insurance was launched in the kharif season of 2003 for the first time in India by ICICI Lombard. After the initial success during 2003-04, the product was offered to a larger area for a wider crop segment.

1) Till date 7800 policies have been sold to 3950 farmers in states of AP, Rajasthan, UP, MP, Tamil Nadu
2) The total claims settled were about Rs.3.2 mn.
3) Weather Insurance cover was offered for crops like groundnut, oranges, coriander, wheat, soy bean, cotton, black gram, castor and gherkins
4) Products were offered to cover different risk parameters like deficit rainfall, excess rainfall, high and low temperatures and a combination of them.

PRODUCT INITIATIVES:

PRODUCT DESIGN:

We have used Crop modeling for reflecting the crop performance in relation to weather for designing our insurance product. We have tied up with various National bodies in Agriculture to offer technically sound products that can be well accepted by the farmers. For wheat we consulted with Indian Agricultural Research Institute (IARI) and for grapes the consulting body was The National Research Center for Grapes (NRC).

RECOGNITION

The Government of Rajasthan has endorsed the product within the first year of its launch, and had given subsidy in premium applicable for the small and marginal farmers.

NON-FARMING APPLICATIONS

PROTECTING THE LENDING PORTFOLIO OF A FINANCIAL INSTITUTION:
A first of its kind weather insurance deal to protect the agricultural lending portfolio of an NBFC – Bhartiya Samruddhi Finance Limited has been offered during the year. The policy insured the NBFC against default of non – payment by the farmer (borrower) in case his crop is impacted by the drop in rainfall and thus his income.

COVERING LOSS OF SALT PRODUCTION:
Expanding the applications for weather insurance, it has been offered to cover the production risk of salt manufacturers. GHCL was the first salt company in the country to whom weather insurance was offered to protect the losses due to excessive rainfall, which lead to drop in salt production. This deal has widened the scope of the product and shows immense opportunity for such products in the non-agriculture sector.

About ICICI Lombard General Insurance

ICICI Lombard General Insurance Company Limited is a 74:26 joint venture between the ICICI Bank, a premier financial powerhouse and Fairfax Financial Holdings Ltd., a US $ 26 billion diversified financial services company engaged in general insurance, reinsurance, insurance claims management and investment management. Lombard Canada Limited, a group company of Fairfax Financial Holdings Limited, is one of Canada’s oldest property and casualty insurers. ICICI Lombard’s success is testimony to the fact that two of the most trusted names in the financial sectors have come together to offer world-class service. ICICI Bank’s strong brand equity, extensive distribution network and sound technological infrastructure to serve customer needs combined with Lombard’s domain knowledge, product innovation and business processes help in providing internationally benchmarked service levels. To Indian Consumer this means the security of strong parentage, with access to a range of customized and innovative insurance solutions that are supported by internationally benchmarked service levels.