The Centre on Friday told Parliament that private insurance companies have not made "windfall gains" under the Pradhan Mantri Fasal Bima Yojana (PMFBY) as the overall claim ratio between 2016-17 and 2018-19 was as high as 81 per cent.
Agriculture Minister Narendra Singh Tomar, in his written reply to the Rajya Sabha, also made it clear that the difference between premium collected and claims paid is not the margin or profit for these firms. The reinsurance and administrative cost totalling 10 to 12 per cent of gross premium also has to be borne by the insurance companies.
The government is implementing two crop insurance schemes of the PMFBY and the Restructured Weather Based Crop Insurance Scheme (RWBCIS).
According to provisions of the PMFBY and the RWBCIS, the minister said premium from farmers along with central and state government share in premium subsidy is paid to the concerned insurance company for acceptance of risk and payment of claims as per provision of scheme.
"Insurers save premium in good seasons/years and pay high claims, if any in bad years from the savings made in the good years," he said adding that crop is all about spreading the risk over the period and over the area.
In spite of overall good monsoon during first three years of the implementation of PMFBY, the claim ratio during 2016-17, 2017-18 and 2018-19 was about 77 per cent, 86 per cent and 80 per cent (provisional), respectively, he said.
Tomar further said that overall claim ratio for the three years combined (2016-17, 2017-18 and 2018-19) comes to about 81 per cent. "But, the farmers in most affected areas/states received higher claims."
To a query if farmers are indifferent towards PMFBY, the minister replied in negative. "No, sir."