Micro Insurance

Akshata Javalagi
Anshu Sindhu
Anusha Giri
Drishya Trivedi
Jayalaxmi Desai
Radhika Chigurupati
Objective
To study and understand the features
of micro insurance provided to an
SHG in BAIF

SCOPE
Study micro insurance implemented by
BAIF in the village of Urulikanchan.
What is Micro Insurance
Protection of low-income people
Payment of regular premium
Proportionate to the income.
Features of Micro Insurance
Clients have low net worth
Enhance risk management of the
members.
Micro Insurance Models
Partner Agent Model
Full Service Model
Provider-driven model
Mutual Model
Micro Insurance Products
Life micro insurance
Health micro insurance
Disability micro insurance
Property micro insurance
Crop micro insurance
Limitations
The study was conducted on a one
day visit
Interaction with only 1 SHG
Language barriers
No formal documents to read through.
BAIF
About Foundation
BAIF Development Research Foundation (formerly
registered as the Bharatiya Agro Industries
Foundation), is a reputed voluntary organisation
established in 1967 by Dr. Manibhai Desai, a
disciple of Mahatma Gandhi, at Urulikanchan, near
Pune to promote sustainable livelihood in Rural
India.
BAIF is a non-political, secular and professionally
managed organisation.


Major activities
The major activities of BAIF are promotion of
Dairy husbandry,
Goat husbandry,
Water resources development,
Sustainable agriculture
Agri-horti-forestry for rehabilitation of tribals
on degraded lands and various rural non-
farm activities for generating employment for
landless families.
Environmental sustainability and
empowerment of women cut across all these
programmes.
Facts
85% of families came out of poverty
through multidisciplinary programme
Increased value of farm produce
A contribution of Rs 2500 crores to the
GDP
Programmes replicated through
various on-going government
schemes.
Associated Agencies
Government Agencies
International Agencies
Scientific and Academic Organisations
Philanthropic Organisations
Corporates
Patrons.
Self Help Groups
Self Help Groups
What is SHG?
Is SHG registered or unregistered?
What type of people form SHG?
Who helps in the formation of SHG?

Role of NGO in SHG
Training
Finance
Social Mobilization
Organizing poor in small groups
Bank Credit and Government Subsidy

Advantages of SHGs
Economically poor individual gains
strength
Reduces transaction costs for both
lenders and borrowers

Problems faced in Micro
Insurance
Fake Claims
Trust and Loyalty
Large Premium Amount
Regular Premium Payment
Low Transaction Cost
SHGs in BAIF
Interaction with Samarth Mahila Alpa
Bachat Gat
Group formed in 1991with 20
members
Two types of micro insurance life
micro insurance and health micro
insurance.
Observation - SHG
Only married women can be a part of
the SHG
Two women from the same family
cannot be in the same SHG
Most educated and one who has a
command on the entire group are
made the President, Secretary and
Treasurer.
The signatory authority for bank a/c is
with the President, Secretary and the
Treasurer.
Observation - SHG
Meeting is conducted twice in a month
Decisions are taken by voting
BAIF provides a framework for the
working of the SHG
Training regarding the working of the
SHG is provided by BAIF
Observation and Analysis
Interaction with women SHG 1991
Need for MI (Micro Insurance) Most
loans taken for medical purposes
Types of MI in BAIF SHG:
Life micro insurance
Health micro insurance
Life micro insurance
Premium - Rs.250 p.a.
Entire Family
Natural death Rs.30,000
Accidental death Rs. 70,000
Compensation varies if body parts lost during
accident
Observation and Analysis
Health micro insurance
2 days haspitalization and bill more than Rs. 5000
Rs. 5000 compensation
Health check-ups conducted freely
50% concession if treatment taken from attached
local hospitals
Rs. 100 p.m. Scholarship - above 60% marks for
students of class 8
th
to 12
th
.
No Claim Benefit 5 yrs, Rs. 300.
Re-insurance
Out of Rs.250 Rs. 80 given to LIC
Rs. 50 Central and State Govt
No T & C for claims Trust and thorough scrutiny
Observation and Analysis
contd
Entire pool of money insured with LIC
If claim is a clustered amount, then
cheque is given in the name of the
SHG
Else cash is paid for individuals
Premium maybe paid in small
installments or a lumpsum amount
If very low claims are made on the
insurance policy for 1 year, then 50%
rebate is given on renewal of the
policy

Observation and Analysis
contd
If premium not paid on time by any
member, it is paid by the SHG, but a
penalty is levied on the defaulting
member
2200 women presently under the
micro insurance scheme (BAIF)
At least 2 women per SHG get the
benefit of micro insurance
Recommendations
Leverage existing network
Link micro credit with micro insurance
Trained HR to cover the HUGE market
and to increase literacy
Develop adequate feedback
mechanisms
IRDA should take initiatives in
widening outreach of microinsurance
products to the rural poor

Conclusion
Rural intermediaries - increase their
business
Economic development, improved
healthcare and education, and political
stability
Lack of local Experts Education and
training
Look beyond short-term gains
Leverage technology smartly, innovation
BAIF proved that it is possible
THANK YOU