‘Micro-insurance will soon graduate into mainstream market-based service’

AGENCIES
Posted on 2008-09-21
MUMBAI - Micro-insurance will soon graduate into a mainstream market-based service, with insurers competing to offer diverse and innovative products, according to Ms Rupalee Ruchismita, executive director, Centre for Insurance and Risk Management (CIRM).
Addressing a conference on ‘Indian micro-insurance: what works?’, organised by Institute for Financial Management and Research (IFMR) Ms Ruchismita said micro-insurance refers to insurance products for low-income individuals, who are not served by typical insurance schemes. Currently, only two per cent of the global micro-insurance market has been tapped. Unfortunately, dissemination and product education are difficult-many poor, who do not see a need for insurance, or trust the companies that offer it, she said.
Micro-finance institutions can serve as distributor, educator and advisor to potential micro-insurance customers. In the context of rural financial inclusion, the micro-insurance sector is vital, as financial inclusion aims to provide savings, credit, remittance and insurance services to the weaker and vulnerable sections of the country at affordable cost, she said.
Speaking on the sidelines of the event, National Bank for Agricultural and Rural Development (NABARD), chief general manager, Mr A Ramanathan said, “NABARD is constantly looking for new initiatives to take the sector further. Microfinance Insights is a unique knowledge generator and network builder in the sector.”
He hoped it would go a long way in supporting knowledge generation about micro-insurance in India. NABARD decided to support ‘Indian Mircoinsurance: What Works?’ to help encourage the development of micro-insurance initiatives, he said.