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Introduction Micro insurance models Distribution channels Conclusion

A micro insurance product in general insurance would cover health,hut,livestock/tools or instruments, personal accident either on individual or group basis and crop insurance. Life insurance products are available for a maximum period of 15 years. Minimum and maximum sum insured are prescribed in both products. A very important feature is that life insurers and general insurers are allowed to have a tie-up to sell each others products.

The non government organizations, self-help groups and micro finance,institutions can be appointed by the insurers to sell micro insurance products,as agreed.The normal distribution channels e.g. agents, corporate agents and brokers can also distribute these products. All insurers have to impart 25 hours of training. All micro insurance products have to be cleared by the authority. These products are be delivered in local language to the policy holders.

Direct Marketing by the insurance company Partner-agent model De-linked model Service Provider Model

Identification of clients, selling of policies, collection of premium, receipts of claims and settlement of claims etc., all are done by the insurance companies Outreach to provide micro insurance to poor through this model has been very limited

Approved intermediary organisations act as insurance agents. Identify the customers, negotiate with insurance companies about the adequacy of products and premium rates to be paid, collect the premium Assist in clients in claim processing and settlement Dominant model

Community based insurance facility where NGO/MFI or federation of the groups act as insurer Coverage of risk remains with the insurer Sum insured, design and pricing of products, adverse selection, collection, claim verification and settlement data collection and maintenance, assessing client satisfaction etc are undertaken internally by the insurer

NGOs generally provide basic health care facilities to the rural population since necessary amenities were simply not present in their area of operation. Instead of premium, the service providers charge a membership fees to partly cover their costs

Agents Regional Rural Banks Cooperative Banks SHGs & their Federations NGOs & MFIs Post Offices Internet & Rural Kiosks & Rural Knowledge Centers

Prime channel for insurance distribution in urban areas Trust of the company & customer must Knowledge of different products Postman,School teacher, shopkeeper, gram sevikas, gram sahayaks Training & educating poses a challenge Not an optimum channel as 42 % of 600,000 villages have population of less than 500

177 RRBs together with14,150 branches cover 516 districts and serve a client base of close to 62.70 million RBI has permitted RRBs to undertake insurance business as corporate agent without risk participation Chitradurga Gramin Bank has -in close cooperation with the NABARD GTZ-Projectintroduced a new deposit scheme for SHGs called Rakshith Savings Bank Scheme in tie up with LIC and UIICo. Ltd

ST structure comprises of 30 SCBs, 367 DCCBs and over 112,309 PACS RBI has allowed scheduled licensed SCBs and licensed DCCBs having a networth of Rs. 500 million to undertake insurance business as corporate agents without risk participation Given their poor governance structures it is unlikely that they would emerge as efficient distribution channels

1.6 million SHGs comprising 24.1 million families are linked to banks Rapidly growing year after year Many SHG promoters have formed federations Federations provide both financial and non financial services Federations promoted by DHAN Foundation are participating in Mutual Insurance Scheme as well as intermediary

Large number of NGOs and MFIs are involved in social as well as financial services intermediation Out of 61 sample MFIs studied by Sa-Dhan 34 were providing insurance services While all 34 MFIs provided life insurance products, only 9 facilitated non life insurance products The most significant range in amount of cover was in the category of Rs.10,000 and above

There are about 129,000 rural post offices. Post Office itself is offering insurance products to the poor Its efficacy as an intermediary channel needs to be explored

Using net for transactions has been catching up in urban areas. Many banks provide online banking Most of the insurance companies have product information and/or illustrative tools on the web In rural areas too rural knowledge centers are being set up to bring information close to the people. The insurance companies can use these centers to create awareness about insurance Can only be enablers for the human channels

micro Finance sector is in evolving phase Innovations are required at all stages for products, in pricing policy and in delivery channels Success of marketing micro insurance depends on understanding the social and cultural needs of the target population Clients should also receive price differentials for using different channels Groups & their promoters can provide ideal platform to kick start the micro insurance

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