Gramcover: Parametric Insurance to protect farmers against weather vagaries

Insurtech startup, Gramcover has introduced “Parametric Insurance” to provide protection for crops, against weather vagaries in conjunction with crop insurance companies. The insurance cover has been created for insurance in states like Maharashtra, Bihar, Andhra Pradesh, Madhya Pradesh and Rajasthan.

A large part of the gross cropped area, 65 per cent is uninsured and in general insurance, access is a challenge for non-loanee farmers who don’t have automatic access to the government-run insurance programmes.

Dhyanesh Bhatt, CEO and Co-founder of Gramcover, said parametric insurance can add great value to the Indian agriculture since 52 per cent of it is rainfed. “This product will have a direct impact in terms of protecting him or her from vagaries of weather and its consequent impact. We at Gramcover truly believe in the effective use of technology for insurance distribution in rural India and are ocussed to use parametric insurance solutions to minimize the financial impact of uncertain weather on the income of millions of farmers.”

Bhatt said the insurance is customizable based on the crop season and crop type. He pointed out that the company tracks different parameters like high temperature, low temperature, high relative humidity, low relative humidity, high rainfall, high wind speed and more.

In the last few months, Gramcover has worked with multiple demand-side partners and insurance companies to create weather-based parametric insurance not only for farmers but also for warehouse capacity creators, which is an industry first. The insurance programme entails tracking of various parameters through automated weather stations and/or IMD gridded data or remote sensing devices.

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Basis on these parameters a crop specific index is derived and the most suitable insurance product is created for a specific crop. For proposals at scale, an automated Weather Stations (AWS) based data point is more reliable whereas  for relatively smaller proposals, the gridded data makes more sense. Gramcover works on both rural retail and B2B2C models for insurance distribution. In both cases, it leverages its partnerships with its point of sale partners and/or the rural organization to bring customized insurance access to farmers.

The traditional crop insurance programmes are based on the assessment of crop yield, making it a time consuming exercise and delays the claim settlement. This parametric insurance provides quicker and transparent claim settlements based on the deviation in the weather parameters from pre-agreed values. With the help of a robust and granular weather data network, this insurance is minimizing the risk and turn around time.