Central government increases premium subsidies for agricultural insurance to benefit farmers
China's insurance regulator said on the 13th that the upgrade and overhaul of central-government premium-subsidized agricultural insurance products launched nationwide at the beginning of this year has been completed, covering 15 categories of crops and 6 categories of livestock and aquaculture varieties, totaling 738 agricultural insurance products. After the upgrade, the protection provided by agricultural insurance products has increased substantially, insurance liability has been significantly expanded, and the benefits to farmers have continued to strengthen.
Since the central government implemented the agricultural insurance premium subsidy policy in 2007, agricultural insurance has developed rapidly, and its capacity to serve “agriculture, rural areas and farmers” has been significantly enhanced. In 2014, agricultural insurance achieved premium income of 32.57 billion yuan, provided risk protection of 1.66 trillion yuan, covered 247 million farmer households-times, and underwrote major crops exceeding 1.1 billion mu.
With the continuous development of China's agriculture, the original agricultural insurance clauses can no longer meet the needs of agricultural risk management under the new situation. Narrow insurance liability, relatively low protection levels, and relatively strict claim conditions have become the problems most strongly reported by farmers.
After this upgrade of agricultural insurance products, insurance liability has been significantly expanded. On the basis of the original natural disaster coverage, crop insurance has added major disasters such as drought and earthquakes, geological disasters such as mudslides and landslides, as well as damage from pests, diseases, weeds and rodents; livestock and aquaculture insurance liability has been extended to all diseases and epidemics. The protection level for major grain crops has increased substantially. In most provinces and municipalities across the country, the insured amount has covered direct materialized costs, and the average protection level has increased by 10% to 15%.
At the same time, agricultural insurance payout standards have been raised and claim conditions lowered. The upgraded products have eliminated absolute deductible clauses, while also raising payout standards for crops at different growth stages and under total-loss situations. Major agricultural provinces have lowered insurance premium rates based on risk characteristics, risk distribution and operating conditions in recent years, with crop insurance premium rates in some areas falling by nearly 50%.
He Hao, deputy director of the Property Insurance Department of the China Insurance Regulatory Commission, said that next the CIRC will improve the product management system, formulate model clauses for major crop insurance, improve the agricultural insurance risk zoning and premium rate floating mechanism, and continue to give play to the positive role of agricultural insurance in supporting agriculture and benefiting farmers.