Search the Internet          Tips  Sites: Finance, Investment

Manure bags come with insurance cover

Sunanda Sanganeria & Sidhartha

Come September and farmers could end up picking up an insurance policy with their bag of fertiliser. As part of a marketing strategy to boost insurance cover sales, Iffco Tokio Marine General Insurance Company is planning to link the premium for policies like crop insurance to the number of bags that a farmer purchases. The company, which is planning a special focus on the agriculture sector, is expected to launch its products before the rabi season.

"We are planning to provide insurance to farmers as an add-on product with fertiliser. Farmers who purchase fertilisers manufactured by Iffco, Kribhco or other co-operatives will pay the premium according to the number of fertiliser bags they purchase.

The products will hit the market in September-October this year," said a senior executive with the general insurance company. Incidentally, the company was one of the first to receive the Insurance Regulatory and Development Authority's clearance, in the first batch of licences issued in October last year.

The general insurance company is a joint venture between fertiliser co-operatives like the Indian Farmers Fertilisers Co-operatives and the Krishak Bharti Co-operative and Godavari Fertilisers and Japanese non-life insurer Tokio Marine, which is one of the largest general insurance companies in the world.

Iffco is the largest shareholder in the general insurance venture with about 45 per cent stake, with Tokio Marine's holding capped at the maximum permissible level of 26 per cent. The remaining shares are held by Kribhco and other fertiliser co-operatives.

The company is evaluating the prospect of launching health insurance products as well as motor insurance. The general insurance company is also working with the Indian Science Research Organisation on product details and also to fix premiums of the products for the agriculture sector.

"Since the product will be related to farmers, we need to monitor the entire scenario in respect of climate, soil and other factors. ISRO will help us in that," said a senior company executive.

Japanese partner Tokio Marine has a wide array of products ranging from crop insurance schemes, currently available in India through the state-owned general insurance companies, to specialised ones like weather insurance to compensate for profit declines and unforeseen costs due to unusual weather.

The international insurer's stable also has other products like farmers' credit insurance and a processing risk floater insurance which provides cover to fertiliser from raw material to product stage.

Tokio Marine also has specialised products for the non-agri sector which includes rent insurance with maturity refund, environmental impairment liability refund, tenant comprehensive insurance, intellectual property dispute legal expenses insurance, volunteer activities insurance as also a brokers' liability insurance.

Powered by

YOU MAY ALSO WANT TO READ:
The Rediff-Business Standard Special
The Budget 2001-2002 Special
Money
Business News

Tell us what you think of this report