Cholamandalam MS General Insurance Company Ltd (Chola MS), is planning to re-enter the Rs. 25,000 crore crop insurance business after a gap of three years.
“Nearly three years ago, we took a pause from the crop insurance business. This year, we are looking to re-enter into the crop insurance space. We have even secured reinsurance arrangements for that,” said V Suryanarayanan, MD, Chola MS.
Suryanarayanan said the crop insurance business is estimated to be around Rs. 25,000 crore, out of which public sector insurers handle about Rs. 12,000 crore while the remainingRs.13,000 crore business is split among the private insurance players. He added that the company has quit the crop insurance business due to issues like non-receipt of premium from some state governments.
In the general insurance industry, nearly 80 per cent of the business comes from motor and health insurance, followed by property insurance (12 per cent) and the remaining from crop insurance.
Suryanarayanan highlighted that crop insurance is a tender-based business and insurance companies have to compete through a tender process to get into a particular State. He said the company is looking to operate in States like Madhya Pradesh, West Bengal, Uttar Pradesh and parts of Rajasthan and Maharashtra.