Remote sensing technology has now made its way to crop insurance. The Agriculture Insurance Company (AIC) in India will be using satellite images to capture crop vigor (biomass) and assess claim payouts to farmers. The company will be using this technology for its wheat insurance policy. The crop vigor will be estimated in terms of Normalised Difference Vegetative Index (NDVI) through remote sensing based satellite images. This will be used as a parameter for deciding indemnity paid to the farmers.
The NDVI would capture crop health and, hence, cover other yield limiting factors such as natural calamities and extreme weather conditions. Agriculture Insurance Company has hired two firms, Risk Management Solutions India and Birla Technology Services for processing the satellite images.
AIC is also considering using the remote sensing technology for insuring tea plantations across the country. A pilot project is under way in the Idukki district in Kerala where satellite images of the tea plantations will be processed this month. The tea insurance product is expected to be ready by next year. The company is also planning the use of satellite images for designing insurance cover for crops such as sunflower, cotton, mustard and rice.