Salico Launches Index-Based Paddy Crop Loss Insurance, Covers 1,305 Farmers on First Day
Sagarmatha Lumbini Insurance Company Limited (Salico) has launched an index-based paddy crop loss insurance policy for excessive rainfall, approved by the Nepal Insurance Authority. The policy covers paddy farmers across 9 districts, with approximately 1,305 farmers and 3,304 kattha of paddy insured on the first day.
Kathmandu. Sagarmatha Lumbini Insurance Company Limited (Salico) has launched an "Index-Based Paddy Crop Loss Insurance Policy for Excessive Rainfall" after receiving approval from the Nepal Insurance Authority. The policy period will be effective from Ashwin 7, 2083 BS to Mangsir 7, 2083 BS.
Designed to address the risk of potential damage to paddy production due to excessive rainfall through an index-based approach and provide compensation, this insurance policy covers paddy farmers in Kailali, Kanchanpur, Dhanusha, Siraha, Sarlahi, Banke, Bardiya, Dang, and Kapilvastu districts. PlantSat by Seed Innovations Pvt. Ltd. has partnered for the issuance of this policy.
The policy has a sum insured of Rs. 1,595 per kattha. On the very first day of issuance, i.e., Ashwin 7, 2083 BS, insurance policies were issued to approximately 1,305 farmers, covering approximately 3,304 kattha of paddy area. The company issued all these policies on a single day.
Compensation Based on Excessive Rainfall Index
Under this policy, compensation will be provided based on the index of the specified maximum accumulated rainfall over three days (in mm), rather than on the assessment of individual damage incurred by farmers.
Simple and Automated Claim Payment Process
A key feature of this policy is its simple and automated claim payment process. If conditions eligible for claim payment arise according to the specified index, farmers will not need to submit a separate claim form, documents, or claim-related details to the insurance company.
The claim amount deemed eligible for payment based on the index will be directly deposited into the farmer's bank account. This will relieve farmers from the paperwork and additional time required in the claim process.
Through this index-based insurance policy, the company believes it will help manage the risk of potential financial loss to farmers by addressing the economic risk of reduced paddy production due to excessive rainfall through a simple, transparent, and technology-based process.