Page 8 - Insurance Times February 2023

experiences is imperative and vency might find it attractive to mum of two animals per beneficiary for
Clootrack's platform will help us do merge," he added. a policy of three years. The ultimate
that." goal of the scheme is to provide pro-
Companies can opt to build a new busi-
tection for farmers and those in cattle
ness by acquiring a composite one, but
Composite licence may this would require more capital than rearing and improve the quality of live-
stock and their products. India has one
boost M&As of life, non- an M&A.
of the largest cattle populations in the
life insurers world, with a lower milk yield per in-
Universal cattle insurance
digenous animal compared to cross-
Allowing insurance companies to have
scheme on cards bred or buffaloes.
a composite licence could trigger a
round of consolidation, according to a The central government is considering
senior analyst at Moody's Investor Ser- introducing a universal livestock insur-
vice. ance scheme that would cover all types Attention Subscribers
of cattle, including indigenous and
Both the insurance regulator and the Please renew your Subscription of The
cross-bred breeds, as well as yak. The
finance ministry have proposed issu- Insurance Times Journal to receive
scheme could be modelled after the
ance of a composite licence. If the copy of the journal uninterruptedly.
Pradhan Mantri Fasal Bima Yojana,
government decides to go ahead with
You can now pay by GPAY, Phonepe,
which is already in place for the crop
its proposal, it will need to amend cur- Paytm, Amazon, ICICI Pay, BHIM UPI
sector, according to reports.
rent insurance laws that specify sepa-
rate licences for life, non-life and rein- This could provide relief to millions of
surance. cattle farmers in India who have suf-
fered significant losses due to animal
"If we take a macro view, the overall
diseases. The scheme could be an-
sector product risk diversification will
nounced in the upcoming Budget and
improve for composite insurers. The
the cost for the first year may be
challenge will remain whether they
scaled up later depending on take-up
have the underwriting expertise to
of the scheme.
convert the risk diversification into
profits. One thing that will aid them is The scheme may be structured in such
distribution and financial flexibility will a way that farmers would pay a low
improve. As a result, there will be premium and the remaining premium
enough investor interest," said would be shared by the state and the
Mohammed Ali Londe, VP -senior ana- central government.
lyst.
The scheme would have a low pre-
"One of the ways we see this happen- mium for farmers, with the remaining
ing is that instead of non-life compa- premium shared by the state and cen-
nies acquiring a composite licence, tral government. This aligns with the
they will merge with life companies so government's "cow protection" initia-
that they can get the underwriting and tive. Currently, many insurance compa-
distribution capabilities," he added. nies offer their own cattle insurance
products. The government has also You can also make payment for
According to Londe, life insurance
previously run a centrally sponsored purchase of Books/Exam Guides
could manage a quick win in health
scheme called the Livestock Insurance from www.sashipublications.com
insurance by merging latter companies
Scheme on a pilot basis in certain dis- through above QR Code
with themselves. "Overall in India, life
tricts.
insurance companies have been able For any query please call
to maintain better solvency and capi- This scheme only covered cross-bred 9073791022/9883398055
tal buffers. As a result, general insur- and high-yielding cattle and buffaloes,
www.sashipublications.com
ers who have future pressures of sol- with a subsidised premium and a maxi-
8 January 2023 The Insurance Times