1. Expanding Weather Insurance to Horticulture Devising the product Devising the product – our experience Selling to farmers- issues thrown up

2. Expanding Weather Insurance to Horticulture DEVISING THE PRODUCT Assumption: Agro-climatic conditions affect the crop Need to identify the agro-climatic vulnerabilities of the proposed crop Involving clients’ agronomists in devising product specifications- farmers’ feedback critical

3. Expanding Weather Insurance to Horticulture DEVISING THE PRODUCT Parameters can be varied covering various phases of plant growth - Excessive rainfall - Deficient rainfall - Excessive temperature - Low temperature -pest congenial climatic conditions

4. Expanding Weather Insurance to Horticulture DEVISING THE PRODUCT Identifying the triggers correctly DO NOT CHANGE THE TRIGGERS IN ENSUING YEARS IF THERE WAS A LOSS -erodes credibility of all agencies - a proxy cover -therefore need to constantly evaluate success of product by random surveys of actual impact at farm level

5. Expanding Weather Insurance to Horticulture DEVISING THE PRODUCT- Our experience AIC very receptive Willing to meet farmers’ requirement Seek volume and geographical spread Very concerned about adverse selection Display flexibility even in non weather based products Concerns remain same which affects ability to improve product and lower prices

6. Expanding Weather Insurance to Horticulture DEVISING THE PRODUCT- the farmers’ requirement Price Premium competing with input costs tendency to ride out the risk without insurance In percentage terms premium is very high- as high as 12 to 15% of the sum assured Insurers point of view- so are the risks and claims

7. Expanding Weather Insurance to Horticulture Selling to farmers –issues thrown up Farming a gamble Proxy cover delinked from actual results accentuates the gamble therefore need to - involve them with weekly weather reports - today totally distanced with no involvement -No assurance that results are accurate - Need for more weather stations - Product features and price

8. Expanding Weather Insurance to Horticulture Selling to farmers –issues thrown up Regulatory issues Cannot employ sub- brokers All sales employees must undergo 100 hours mandatory training Institutes in large towns and cities only Fees Rs 10-15 K per employee add living expenses and attrition

9. Expanding Weather Insurance to Horticulture Selling to farmers –issues thrown up Issues not very different from New Pension Scheme -Incentive to sell is low -Income potential does not warrant initial expense -Banks perhaps best suited to sell even to ‘non- loanee’ farmers as part of fee based income -Who fills in the gap on product features? Corporations involved in contract farming & NGOs.

10. Expanding Weather Insurance to Horticulture THANK YOU