Insurance is generally perceived to be for the rich and by nature exclusionary, out of poor people’s reach. It was only after the tsunami devastation that we thought of leveraging the ‘power’ of insurance for ‘the poor’ by adapting it to the needs of the low income population. (Right: women waiting in queue during the enrolment drive.)
Post tsunami, the question that hounded us was how long aid and subsidies could continue to be the only answer to the emergency response. An urge to weave insurance into household and livelihoods fabric was felt across board but the challenge was how to attract insurance providers to look at the marginalised and excluded communities. So we put together most risks faced by the community, aggregated the demand for insurance services and customized the insurance products making the insurance product cheaper and affordable. The premium was a low as INR 250 for covering life and non life risks.
Benefits Demonstrated:
The incidence of the cyclone Nisha which hit Tamil Nadu in November 2008 and left vast stretches of crops, huts and assets damaged. By this time we had already reached a substantial number of people. The insurance provider, Bajaj Allianz, settled 12,700 claims amounting to INR 35 million, approximately USD 800,000. Since then, there has been spurt in enrollments reinforcing community’s belief that insurance will work at times of disasters!
Low cost health insurance coverHealth risks are ranked as top priority by the communities in general, which was reinforced by our demand cum risk assessment study. But in our quest to develop a suitable health insurance product, we found that health insurance is generally costly and excludes most illnesses. In partnership with Allianz-a lead player in insurance globally- we came up with an innovative risk pooling mechanism between community and company. Now health insurance for the whole family costs as low INR.392/- or USD 8 is a reality.
Insuring People Living with HIV/AIDS(PLWHA)
Traditionally communities affected by HIV/AIDS do not enjoy any insurance support from insurance companies as they are perceived as ‘very high risk population’. Companies are scared to underwrite insurance for the life of HIV population perceiving them to be people on the “brink of death”. But taking into account the reality of the lives of the PLWHAs and the desire on their part to leave something behind for their dependents on their death, we designed a life insurance cover for the Persons Living with HIV/AIDS (PLWHAs) in partnership with the community.
The product was designed taking into account the average life span of a PLHA which is observed to be 13-14 years since they are identified as positive. This product also has provision to cover their funeral expenses in the event of death.
Other innovative products covering excluded illnesses and excluded communities
Critical illnesses such as cancer, diabetes, bronchitis are not covered by the existing insurance products.
We initiated a pilot project to explore the feasibility of developing micro health insurance products that offer exclusive cover for such excluded diseases.
The salt pan workers produce salt under hazardous conditions but are not covered under insurance. Now a system of rain index based insurance reassures production losses on account of rains during May in coastal belts of Andhra Pradesh. (Left: A salt pan worker).
Educating about micro-insurance
One of the important factors that cause low acceptance of insurance amongst the poor communities is the lack of awareness on insurance. We have invested more resources in community education on insurance principles and risk profile. Thus, we have worked to sensitise our partner NGOs to use a variety of communication tools and strategies to attract rural communities so as to enable them to understand and appreciate the need for insurance services.
Post tsunami, the question that hounded us was how long aid and subsidies could continue to be the only answer to the emergency response. An urge to weave insurance into household and livelihoods fabric was felt across board but the challenge was how to attract insurance providers to look at the marginalised and excluded communities. So we put together most risks faced by the community, aggregated the demand for insurance services and customized the insurance products making the insurance product cheaper and affordable. The premium was a low as INR 250 for covering life and non life risks.
Benefits Demonstrated:
The incidence of the cyclone Nisha which hit Tamil Nadu in November 2008 and left vast stretches of crops, huts and assets damaged. By this time we had already reached a substantial number of people. The insurance provider, Bajaj Allianz, settled 12,700 claims amounting to INR 35 million, approximately USD 800,000. Since then, there has been spurt in enrollments reinforcing community’s belief that insurance will work at times of disasters!
Low cost health insurance coverHealth risks are ranked as top priority by the communities in general, which was reinforced by our demand cum risk assessment study. But in our quest to develop a suitable health insurance product, we found that health insurance is generally costly and excludes most illnesses. In partnership with Allianz-a lead player in insurance globally- we came up with an innovative risk pooling mechanism between community and company. Now health insurance for the whole family costs as low INR.392/- or USD 8 is a reality.
Insuring People Living with HIV/AIDS(PLWHA)
Traditionally communities affected by HIV/AIDS do not enjoy any insurance support from insurance companies as they are perceived as ‘very high risk population’. Companies are scared to underwrite insurance for the life of HIV population perceiving them to be people on the “brink of death”. But taking into account the reality of the lives of the PLWHAs and the desire on their part to leave something behind for their dependents on their death, we designed a life insurance cover for the Persons Living with HIV/AIDS (PLWHAs) in partnership with the community.
The product was designed taking into account the average life span of a PLHA which is observed to be 13-14 years since they are identified as positive. This product also has provision to cover their funeral expenses in the event of death.
Other innovative products covering excluded illnesses and excluded communities
Critical illnesses such as cancer, diabetes, bronchitis are not covered by the existing insurance products.
We initiated a pilot project to explore the feasibility of developing micro health insurance products that offer exclusive cover for such excluded diseases.The salt pan workers produce salt under hazardous conditions but are not covered under insurance. Now a system of rain index based insurance reassures production losses on account of rains during May in coastal belts of Andhra Pradesh. (Left: A salt pan worker).
Educating about micro-insurance
One of the important factors that cause low acceptance of insurance amongst the poor communities is the lack of awareness on insurance. We have invested more resources in community education on insurance principles and risk profile. Thus, we have worked to sensitise our partner NGOs to use a variety of communication tools and strategies to attract rural communities so as to enable them to understand and appreciate the need for insurance services.
R. Devaprakash is Project Director, Insured Lives and Livelihoods and Director Tsunami Response Programme.
good effort amelia!!
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