Банкеръ Weekly



Changes in the methodology for assessment of the lossess from insured crops, damaged by frost, have been approved by the BoD of DZI-General Insurance AD. That will enable the farmers to get better compensation. The novelty is that when more than 50% of the crop has been damaged in the first phase of development and needs to be planted again, it is automatically accepted that 100% of the crop has been entirely destroyed. The compensation is paid as a percentage, depending on the kind of the crop. If it is oil-bearing, the payable compensation is 20% of the insurance amount, and if is a cereal - the compensation is 30 per cent. E.g. if 1,000 dca of wheat, insured at BGN50/dca, should be planted again, the total insurance amount will be BGN50,000. Under the so far effective methodology, if 60% of the crop has been damaged, the base insurance amount for BGN50,000 will be BGN30,000, and 30% of it, or BGN9,000 shall be paid in compensation. Under the new methodology, the compensation for the same insurance amount of BGN50,000 would be BGN15,000. The new crop to be planted is to be insured again. The insurance premium for it will be deducted from the due compensation and will amount to 6-8% of the insurance amount. The new methodology will ensure just compensation to the farmers, who were discontented with the fact that so far they got as compensation only 60%, although they had to plant again the entire crop and suffered therefore significant lossess. When the damage is smaller, the preliminary assessment remains valid and after the end of the summer the crop's ability to revive is estimated. Farmers who are not willing to plant crops again due to lack of funds, seeds, or time, get the calculated compensation and the insurance police is cancelled. A new insurance might be closed for the remaining crop. DZI-General Insurance AD paid BGN2.2MN in compensation of crops, damaged by frost. The aggregate losses amount to some BGN3MN. Despite the poor year, the financial result from insurances of agricultural crops will be positive, as the premium proceeds amount to BGN4MN.

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