Bridging Risk and Resilience Financial Viability and Adoption Dynamics of Crop Insurance in India

Abstract

The article Financial Viability and Adoption Dynamics of Crop Insurance in India] assesses the performance of the Indian crop-insurance ecosystem after 2020 in terms of a detailed mixed-methods research design. These objectives aim to estimate financial feasibility, examine the basis risk in area-yield and weather-index models, behavioural and adoption dynamics in farmers, as well as policy and technological innovations that may increase resilience and claim efficiency. Descriptive statistics, ANOVA, t-tests, logistic regression, etc were used to analyse quantitative data and interviews, focus group discussions, and consultations with experts provided insights in qualitative terms. Findings reveal a high level of variance in loss ratios and insurer profitability as well as settlement schedules across states which demonstrates lack of actuarial soundness and support the financial-viability hypothesis. Basis-risk analysis shows statistically more mismatches with index-based insurance, indicating the necessity of a better design of products. Analysis at the farmer-level confirms the awareness, digital access, trust and prior claim experience to be highly predictive of adoption, but income has low predictive power. Technology interventions have a great impact on shortening the claim-settlement time, which proves their effectiveness in improving the effectiveness and resilience of the system. In general, the research offers combined findings that financial fine-tuning, product redesigning, behavioural involvement, and digital innovation could be necessary to enhance the crop-insurance system of India and broaden sustainable risk-covering of farmers.