Strong governance in member owned institutions (MOIs) is important for their sustainability. If the governance is weak, there are high chances of fraud by staff, members with vested interests, and by the social and political elite. Such a situation could lead members to lose faith and withdraw their shares/ and leave the institution. An MOI with strong governance is able to establish a conducive environment for members through the right mix of ownership incentives, member decision-making and other control mechanisms. Good governance structures give members and investors confidence and are necessary foundation for successful community-based organisations.
Blog
Challenges of Microinsurance in India
After half a decade of microinsurance regulation, there are some clear trends emerging in the way microinsurance business is conducted in India. According to the IRDA Annual Report, 2010-11, 3.65 million microinsurance policies were sold in India in the year 2010-11 covering lives of 18.9 million people. The cumulative premium collected from microinsurance was Rs.2.86 billion. Some of the trends in the regulated microinsurance sector are:
The public life insurer is the clear market leader in microinsurance,
Group microinsurance policies have become popular with the private players,
Most insurer still continues with a “”Just Achieve Target”” approach for microinsurance,
Insurers have found alternative to microinsurance products for achieving their “”rural sector”” targets, and
Microinsurance distribution has remained un-uniform in spite of the special regulation on Microinsurance Agents (MIA)
This Note analyses these trends with decade long comparative data on microinsurance products and their performance. The reasons for the emerging trends are identified and possible future trends are also projected.
Microinsurance in India – The Evolution of Market Trends
After half a decade of microinsurance regulation, there are some clear trends emerging in the way microinsurance business is conducted in India. According to the IRDA Annual Report, 2010-11, 3.65 million microinsurance policies were sold in India in the year 2010-11 covering lives of 18.9 million people. The cumulative premium collected from microinsurance was Rs.2.86 billion. Some of the trends in the regulated microinsurance sector are:
The public life insurer is the clear market leader in microinsurance,
Group microinsurance policies have become popular with the private players,
Most insurer still continues with a “”Just Achieve Target”” approach for microinsurance,
Insurers have found alternative to microinsurance products for achieving their “”rural sector”” targets, and
Microinsurance distribution has remained un-uniform in spite of the special regulation on Microinsurance Agents (MIA)
This Note analyses these trends with decade long comparative data on microinsurance products and their performance. The reasons for the emerging trends are identified and possible future trends are also projected.
Microinsurance Product Types in India
Microinsurance products in India can be classified into four different types:
Products registered as microinsurance products;
Rural and social products not registered as microinsurance products;
Community based products in partnership with insurance companies; and
Independent community based microinsurance products
Microinsurance products are registered by insurers as a response to the Microinsurance Regulation (2005). These products are mostly delivered through MFIs and are mostly are of the nature of credit-life insurance. Beyond these products, there are lot of group insurance, savings linked products and general insurance products, targeted at the low income clientele. These are filed by different insurers over the last decade and are not registered as microinsurance.
India is also home to a host of community based insurance schemes, either in partnership with insurance companies or run independently. This Note analyses the characteristics and uniqueness of these different microinsurance types with their effectiveness in delivering insurance services to the bottom of the pyramid.
Savings perceptions and preferences in India – The relative risk to the savings of the poor
MicroSave conducted a study in three different Indian states – Rajasthan, Uttar Pradesh, and Tamil Nadu this past year to seeks answers to the following questions: How do poor people save and what works best for them among the formal, semi-formal, and informal choices available? Why do they choose one investment or savings versus another, and what atttributes are most important in this decision? What are the risks involved, and how are they different for formal, semi-formal and informal savings?
Coping with Dormancy
“In this video Graham W. N. Wright, Group Managing Director, MicroSave, sights dormancy as the biggest problem for all mobile money implementations. With the help of case studies he explains the biggest challenges of customer adoption. Sighting examples of M-Pesa and Eko, he concludes ensuring the incentives to transact both for customers and agents are essential to deal with dormancy.