Our reporter Chen Jingjing reports from Beijing

Since the central government launched the policy oriented agricultural insurance pilot in 2007, the business scale of China’s agricultural insurance has grown rapidly and played an important role in serving “agriculture, rural areas and farmers”.

On April 6, the China Banking and Insurance Regulatory Commission issued the notice on the key work of comprehensively promoting rural revitalization in banking and insurance services in 2022 (hereinafter referred to as the notice). The signal released by the notice is very obvious: agricultural insurance is indispensable for comprehensively promoting rural revitalization, and has great prospects in the future.

The reporter of China business daily noted that previously, in February 2022, in the opinions on comprehensively promoting the key work of Rural Revitalization in 2022, the “Strengthening Rural Revitalization financial services” was listed as an important content for the first time, and the “insurance” was mentioned 10 times.

According to public data, in 2021, the premium income of agricultural insurance was 97.6 billion yuan, with a year-on-year increase of nearly 19.8%. From the perspective of premium income, the premium income of agricultural insurance maintained a high growth rate and was faster than the overall growth rate of the property insurance industry, accounting for an increasing proportion.

Industry insiders expect that in the next few years, all localities will continue to introduce agricultural insurance support policies, and the subsidy of agricultural insurance premium will maintain an increasing trend for a long time. The annual growth rate of agricultural insurance premium is expected to remain above 15%, or even reach 20%, becoming an insurance type with great growth potential in the property insurance business.

Improve the insurance coverage of bulk agricultural products

It is understood that the circular has put forward the overall goal of ensuring the stable growth of agricultural credit investment. Among them, the banking and insurance regulatory bureaus are required to scientifically formulate plans for the improvement of county deposit loan ratio within their jurisdiction, continuously monitor the adaptation of county credit funds and the level of county insurance guarantee, and urge the realization of the continuous growth of agricultural loan balance in major grain producing counties in 13 major grain producing provinces. It is proposed to strive to realize the continuous growth of loan balance and agricultural insurance coverage in 832 poverty relief counties; The insurance varieties of advantageous and characteristic agricultural products in poverty relief counties have increased steadily. Banking and insurance institutions operating in poverty-stricken areas, especially policy banks, large banks, joint-stock banks and major agricultural insurance underwriting companies, should strive to maintain the growth of various loan balances and agricultural insurance coverage in poverty-stricken areas. We will strive to ensure that the average growth rate of loans in 160 national key Rural Revitalization assistance counties is higher than that of national loans, and each key assistance county has at least one characteristic agricultural product insurance product.

At the same time, the notice also clearly proposes to enhance the function of insurance services in Rural Revitalization. Insurance institutions are required to implement full cost insurance and planting income insurance for the three major grain crops, covering major grain producing provinces and counties. Explore the development of sugar cane full cost insurance and planting income insurance. Steadily expand the coverage of large-scale agricultural product insurance related to the national economy and people’s livelihood and national food security, accelerate the development of seed industry, soybean and oil crop insurance, and vigorously develop agricultural product insurance with local advantages and characteristics. Actively carry out high standard farmland construction project quality assurance insurance and cultivated land fertility index insurance. Improve the agricultural insurance coverage rate of small farmers. We will accelerate the development of insurance business to deal with major natural disasters such as typhoons, earthquakes and floods, and improve the level of agricultural and rural natural disaster insurance.

In May 2019, the central deep reform commission deliberated and adopted the guiding opinions on accelerating the high-quality development of agricultural insurance (hereinafter referred to as the Guiding Opinions), which promoted agricultural insurance to the national strategic level for the first time, improved the service capacity of agricultural insurance, optimized the operation mechanism of agricultural insurance, promoted the high-quality development of agricultural insurance, and better met the growing demand for risk protection in the field of “agriculture, rural areas and farmers”. As an important guarantee for “agriculture, rural areas and farmers” and a disaster risk dispersion mechanism, the role of agricultural insurance as a risk shock absorber and social stabilizer will be further brought into play.

Our reporter found that focusing on “expanding coverage, adding products and raising standards”, China has carried out a series of major agricultural insurance pilot projects. In 2017, we implemented the deployment of the government work report on the implementation of catastrophe insurance for farmers operating on an appropriate scale, selected 200 major grain producing counties in 13 major grain producing provinces, and launched the pilot of agricultural catastrophe insurance, raising the guarantee level to “direct materialized cost + land rent cost” on the basis of covering direct materialized cost. In 2019, the scope of implementation will be expanded to 500 major grain producing counties. In 2018, 24 major grain producing counties were selected in six major grain producing provinces to deploy a three-year pilot of full cost insurance and income insurance for rice, wheat and corn, promote the level of security, realize full cost and full coverage of “direct materialized cost + land rent cost + labor cost”, and actively explore the development of grain income insurance. In 2019, the central government will launch the pilot of replacing compensation with awards for local advantageous and characteristic agricultural products insurance in 10 provinces. In 2020, the pilot implementation scope will be expanded to 20 provinces, and the pilot insurance objects or insurance products in each pilot province will be increased to three. According to the Rural Revitalization strategy proposed at the 19th national congress, China has piloted three major grain crop full cost insurance and income insurance in six provinces since 2018. Subsequently, the insurance coverage has been continuously improved, and the pilot scope will be expanded to 13 provinces in 2021.

According to the disclosure on the official website of the Ministry of agriculture and rural areas, the scope of central financial subsidies includes three major grain crops and 16 varieties related to the national economy and the people’s livelihood, including seed production, potato, oil crops, sugar crops, fertile sows, dairy cows, fattening pigs and natural rubber. All localities actively develop local characteristic advantageous industry insurance. The national agricultural insurance covers more than 270 crop varieties, and products and services are covered in all agricultural production fields of agriculture, forestry, animal husbandry and fishery.

Our reporter learned from the China Banking and Insurance Regulatory Commission that in 2021, the China Banking and Insurance Regulatory Commission continued to promote the expansion of agricultural insurance, the addition of products and the raising of standards, so as to improve the service capacity of agricultural insurance. Jointly issued with the Ministry of Finance and the Ministry of agriculture and rural areas the notice on expanding the implementation scope of full cost insurance and planting income insurance for the three major food crops, so as to further expand the coverage of agricultural insurance and improve the level of food crop security. Strengthen research in key areas and improve infrastructure construction. Actively promote the work of forest insurance risk zoning, explore and carry out the pilot work of county-level zoning of three major grain crops in six provinces, and promote the scientific and accurate zoning of agricultural insurance risk and premium rate. Guide industry associations to formulate demonstration clauses for forest insurance, fattening pig insurance and breeding sow insurance products, and improve the level of product standardization. Strengthen scientific and technological empowerment, promote agricultural insurance data sharing, and promote national agricultural insurance commitment