ICICI Lombard General Insurance and Weather Risk Management Services have introduced a new weather insurance product for farmers growing wheat in the Patiala district of Punjab in India.
The new insurance product will use satellite images to assess crop yields. The state governments of Jharkhand and Tamil Nadu have said that they will also introduce the new product in some of their districts.
The insurance product can determine the yield by using Normalised Difference Vegetation Index, which is a numerical indicator derived from satellite or aerial images for assessing the crop health at any particular point of time. The data to determine the yield can be determined from four factors and they include soil, moisture data from satellite images, temperature and rainfall data from ground weather observatory stations.
The farmers will be paid depending upon yield and if the yield is less than the normal yield then they be paid for the difference. The new product can settle claims in 30 days.