China will carry out its first regulation on agricultural insurance starting Friday, with the sector's big potential attracting insurance companies.

As more favorable policies for the sector have been carried out, the number of agricultural insurance service providers in China has increased to more than 20 companies at present from six in the past.

China's agricultural insurance premiums totaled 24.1 billion yuan ($3.87 billion) in 2012, a 38.4 percent growth compared with one year ago, according to data from the China Insurance Regulatory Commissions.

However, there are still obstacles in increasing the market coverage of agricultural insurance, including slower growth of farmers than urban residents and weak insurance awareness, experts said.