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ANNUAL REPORT 2007-08

conducted a few pilot studies on using satellite imagery for crop insurance applications. The applications include: (i) estimating cropped acreage under different crops; (ii) stress detection and crop health reporting; and (iii) generating yield estimates at insurance unit level for insured crops. Despite some problems associated with satellite imagery, it may be possible in near future to use satellite imagery to estimate crop yields at block / tehsil level, which on one hand, could enable settlement of crop insurance claims faster, and on the other, minimize human intervention in estimating the crop yields.

Weather Insurance:

implement the pilot in a few districts, as well.

Good density of weather stations (at least one station per Block) and supply of weather data on near real-time basis is critical for weather insurance. At present, the IMD network is mostly limited to district headquarters and a majority of weather stations are manually operated, hampering the expansion of weather insurance. IMD, however, has recently decided to expand and automate the weather stations’ network, and accordingly, about 550 automatic weather stations and 1350 automatic rain gauges are expected to be installed in near future. This expansion and automation is expected to strengthen the efforts to help extending weather insurance.

The Government is piloting weather based crop insurance in a few States as a substitute for National Agricultural Insurance Scheme (NAIS) to evaluate the relative strengths and weaknesses of these models. Weather (Rainfall) based Crop Insurance was implemented on a pilot basis as a substitute for NAIS in Karnataka during Kharif 2007 season, and subsequently in Bihar, Chhattisgarh, Madhya Pradesh & Rajasthan during Rabi season. The pilot was extended to seven more states (Bihar, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Orissa & Rajasthan) during Kharif 2008 season. Haryana & Punjab have also piloted weather insurance in one tehsil each during Kharif 2008 season. Tamilnadu is likely to

It is important to note that all States are not convinced about the effectiveness of weather insurance in comparison to practically an ‘all-risk’ NAIS. There is a view that integrating ‘weather index’ with NAIS may be a better alternative, instead of promoting weather insurance as a stand-alone insurance. The major shortcoming of NAIS happens to be delay in settling claims, and this can resolved by giving en early ‘payout’ on the basis of ‘weather index’, with the final payout based on the yield index. In this way, the strengths of ‘yield index’ and ‘weather index’ based insurance can be successfully availed

in providing effective crop insurance.

ix) Micro-Insurance Life Insurance Sector

The Micro-Insurance portfolio has made steady progress in the year. More life insurers have commenced their Micro-Insurance operations and many new products have been launched during the year under review. The distribution infrastructure has also been considerably strengthened and the new business has shown a decent growth, though the volumes are still small.

TABLE 41

NEW BUSINESS UNDER MICRO-INSURANCE PORTFOLIO FOR 2007-08

(Premium in Rs lakh)

Individual

Group

Insurer

Policies

Premium

Schemes

Lives covered

Premium

51

51

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