Microinsurance initiatives in India

Microinsurance, which is based on the same principles as Microfinance and Development through enterprise, has become quite popular in India recently, with some of the big players in the Indian insurance space making a foray into this field.

The most inspiring one among these is the "Yeshasvini" initiative, which was pioneered by Dr. Devi Shetty, a heart surgeon, who is also the founder of "Narayana Hrudayalaya", an internationally acclaimed heart care hospital in Bangalore, India. "Yeshasvini", which was launched in 2003, insured 1.6 million in its first year, when the premium was as low as Rs. 60 per annum (about $1.5). The number insured rose to 2.2 million in its second year, but dropped to 1.45 million in the third year owing to an increased premium of Rs. 120 per annum (about $3). Nevertheless, Yehsasvini is a pioneering initiative in India and Dr. Devi Shetty's concern for the health of the rural poor is simply amazing. Dr. Shetty, who studied medicine in India and in the UK, was also Mother Teresa's personal doctor.

Yeshasvini's success is all the more special since it was not driven by any insurance company but was successful in mobilizing co-operative societies, with help from the Karnataka State Government's Department of Co-operation. The scheme has since been launched in other Indian states too. Here is the link to a case study of this scheme by ILO:

http://www.ilo.org/public/english/employment/finance/download/cstudy20.pdf

A personal profile of Dr. Shetty can be found here:

http://www.virtualbangalore.com/Ppl/PplDrDevi.php

The Microinsurance industry in India received a shot in the arm recently, when the state-owned Life Insurance Corporation of India (LIC) decided to enter this segment. LIC of India is one of the world's largest insurance companies, with more than 190 million customers. Almost everyone I know in India has a life insurance with LIC and I have literally seen people making a lucrative career out of being LIC agents. This foray into the Microinsurance sector will be benefitial not only to the poor by giving them access to quality health care but also to thousands of others by providing them employment as agents. Here is the link to a recent article about this initiative by LIC:

http://news.moneycontrol.com/mccode/news/article/news_article.php?autono=274827

Tata, one of the largest business houses in India, announced its foray into the Microinsurance sector last year, through its insurance joint venture, Tata AIG, which became the first insurance company in India to come up with a focused Microinsurance scheme. Tata has always been known for its concern for the community in which it operates and the economic development around its flagship Tata Steel factory in Jamshedpur in Eastern India is a living example. Tata Motors' efforts to come out with a Rs. 1 lakh ($2000) car is well known too. This initative by Tata AIG just re-iterates Tata's commitment to sustainable development in India. Details can be found here:

http://www.tata-aig-life.com/News/Pdfs/Rural_draft%20Press%20Release.pdf

German insurance company, Allianz AG, through its joint venture in India, Bajaj Allianz, also announced its Microinsurance foray last year, in collaboration with CARE International. The first products are expected to roll out this year. For further info, the following link can help:

http://www.allianz.com/en/allianz_group/press_center/news_dossiers/microfinance/news6.html