Micro Insurance Project Marketing)

Evaluation of micro insurance in India

Index       

Introduction. IRDA’s initiative in micro insurance. 4P’s of micro insurance. 5th P of micro insurance. SWOT Analysis. Niche creation. Critical success factor.

Introduction. 

Micro-Insurance is a key element in the financial services packages for people at the bottom of the pyramid.

Micro insurance is… “…A mechanism to protect low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved”

Micro insurance is not… •

Small insurance companies.

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Just another product offered by MFIs.

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Regular insurance products with smaller sums insured and premiums.

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Savings, credit, risk prevention.

IRDA’s Initatives   

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Developmental Initiatives:Legislature delegated developmental responsibilities – A unique model. Ensuring orderly growth and penetration of insurance are the prime objectives. Introduction of development oriented regulations to Bridge the Demand Supply gap.

Mandatory Norms :-

Rural Sector - Life Insurers  First 5 years - 7% to 16% of total policies underwritten  6th to 10th* year - 18% to 20% Non Life  First 5 years - 2% to 5% of total gross premium  6th to 10th* year - 5% to 7%. Social Sector - Life & Non Life  5000 to 20000 lives for the first 5 years and 25000 to 55000 lives for 6th to 10th year*

4 P’s 

Product:

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Price:

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Place:

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Promotion: Sold by unlicensed, non traditional agents,

Credit Life, Endowment & Term Life, Personal, Accidental, Property, Health, Agriculture Insurance. Policies are simplified according to the market. Very low priced products with lump sum, irregular & frequent options to cover different risk structures. Target audience resides in rural or semi urban India.

Banks (Co-operative, formal, rural), SGH’s, NGO, MFI, Post Office, Internet, KIOSKS, Rural Knowledge center.

PEOPLE A

A Commercial Insurance for wealthy individuals and companies, as well as compulsory products.

B Wealthy

Middle Income

B Most of non-motor related commercial insurance.

C Low Income

D E

C Social security and public health services. D Aggregate market for microfinance providers.

E Potential market for micro insurance. Policyholders (the market):People do respond to “good” products. Generally lack understanding of insurance and thus require knowledge and appreciation . Education, marketing, policy documents MUST be simple and appropriate . We need to help people link needs with insurance as an Destitute / Severely Poor

SWOT 

Strengths :   

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Huge untapped market share Global push from UN & ILO Caters to CSR of organization

Weakness :   

Mind share against saving Lack of infrastructure Cost of distribution & low penetration in rural & semi urban

“ Micro insurance has never been a part of thought process, it has always been after thought”

SWOT 

Opportunity : Emerging market  Saturated urban market  Government intervention 

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“ The pioneer will be the market leaders ” Threats : Moral hazards & Physical hazards  Data base research not possible  High investment & low return on investment 

NICHE creation 

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Products : Designed as per the requirement of market Price : Reasonable prices Place : Establish branches in rural area. Need to tie up with more NGO & Social bodies.

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Promotion : Club with Govt. development strategies

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People : creating

Give training to local resourses for awareness and emlopyment

Critical success factors 

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Simplification of products and bundling where requires making them easy to understand, easy to use, sell and service. Simplifying and making premium payment plans flexible to suit farmer needs. Focus on volumes by targeting large groups. Integrating micro finance activities with micro insurance for a most beneficial outcome. Claim settlement to be timely, simple and transparent. Maximizing the benefit of connectivity revolution in rural India to reach the unserved markets. Using additional innovative distribution channels to achieve cost-efficiency in agricultural markets.

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