The crop insurance segment in India has faced significant headwinds, with premiums declining 43.6% YoY in 11M FY2026. This sharp decline has been a major drag on the non-life insurance industry's overall growth, highlighting the structural challenges in India's agricultural insurance framework.
The Pradhan Mantri Fasal Bima Yojana (PMFBY)
Launched in 2016, PMFBY is India's flagship crop insurance scheme, aiming to provide affordable insurance coverage to farmers against crop loss due to natural calamities, pests, and diseases.
Sources: Business Standard (April 2026), ICRA Insurance Sector Report (April 2026)
The Scale of Agricultural Risk in India
Indian agriculture faces a unique combination of risks that make crop insurance not just beneficial but essential. With 60% of cultivated area dependent on monsoon rains, drought and flood events can devastate entire farming seasons. The economic impact extends beyond individual farmers — crop failures ripple through rural economies, affecting input suppliers, processors, and distribution networks.
The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016, represents the government's flagship approach to agricultural risk management. However, penetration remains low, with only about 30% of gross cropped area covered under any form of crop insurance. This coverage gap represents both a challenge for food security and an opportunity for insurers willing to invest in rural distribution and technology-enabled underwriting.