Microinsurance - Taking Risk Management to the Grassroots - Sample Reports

Microinsurance - Taking Risk Management to the Grassroots << Previous
Report Code: SAMP-001 Period: 1970 - 2005 Industry: Microfinance Organization: - Countries: India, Bangladesh, Zambia	Report Length: 11 Pages Pub Date: 2005

INTRODUCTION

Till the late 1990s, microfinance institutions (MFIs) focused primarily on providing credit and facilitating savings among the poor. However, over time, their activities and product portfolio have widened considerably in scope. With the opening up of the Indian insurance sector in 1999, MFIs also began to offer insurance products to their members. This helped them to cover their loan portfolio from risks that could affect their client’s repayment capacity.

Insurance firms, especially new entrants in search of alternative delivery channels, tied up with MFIs to deliver their products to underserved markets. The insurance companies could tap into this segment at lower transaction costs as the MFIs had a ready base of customers coupled with an organization structure and systems to support delivery and service.

Insurance products in this segment also evolved from the ‘plain vanilla’ life insurance products to more structured ones such as endowment policies and rainfall insurance. Working with the MFIs helped the insurance companies to customize their products to the specific needs of the target group, thus ensuring better acceptability. Microinsurance enabled the poor to manage risks. This association - between the poor (rural and urban), the MFI, and the insurance company - resulted in a win-win partnership for all.

Poor at Risk >>