Punjab has developed into a leading producer of citrus fruits in India with a cultivated area of over 52,000 ha and an annual production of 10.5 tons. Key risks for citrus plantations include extremely dry and cold conditions that can destroy the fruit and cause injuries to the plants. Pests and diseases are further risks to fruit and plants which can lead to significant financial losses if adequate treatment is not available.

While working for Swiss Re, a global reinsurer, we had the opportunity to visit a newly established citrus plantation in Punjab where investors mandated the management to enquire about production risk insurance. We flew from Delhi to Chandigarh and undertook a three-hour car ride to visit the plantation close to the Pakistani border. Based on the experience in the (re)insurance of citrus plantations in other markets, we advised the plantation manager on different solutions to insure weather perils ranging from indemnity- based to index solutions that can be reinsured on a facultative basis. We further highlighted that the insurance of pests and diseases will be challenging in general and can hardly be structured through weather indices alone. It was interesting to see how the local community is involved in the citrus production and that field crops are grown in between rows of citrus plants to optimise water usage.