WORKSHOP ON MICRO INSURANCE

ISSUES AND SPECIAL BARRIERS IN SERVICING MICRO INSURANCE CLIENTS By Dr.P.NARAYANA RAO, Senior Divisional Manager, The Oriental Insurance Co. Ltd. Divisional Office, Kakinada

THE MICRO CLIENT? A RETAIL CUSTOMER, A PERSONAL LINES POLICYHOLDER, A NON- INDUSTRIAL POLICYHOLDER, MAY BE A RESIDENT OF RURAL/SEMI- URBAN/URBAN.

THE MICROINSURANCE PRODUCTS  GPA  JPA  UHS  PA  NAGRIK SURAKSHA  HUT  CATTLE  SHEEP & GOAT  HOUSEHOLDERS  MEDICAL  FISHPONDS  PLANTATION  FARMERS PACKAGE  RAJARAJESWARI  BHAGYASREE CHILD  BULLOCK CART  BICYCLE  OTHER RURAL INSURANCES.

ISSUES RELATING TO UNDERWRITING  NO PUBLICITY – NOT AWARE OF THE POLICIES  NO KNOWLEDGE ABOUT THE COVERS  LOW PREMIUM INCOME – AGENTS ALSO NOT CANVASING AT MICRO LEVEL – HENCE PUBLIC NOT AWARE OF THE PROCEDURE AND WHOM TO APPROACH.  INDIVIDUAL/SMALL GROUPS NOT VIABLE  POLICIES ISSUED THROUGH BANKS / FINANCIAL INSTITUTIONS – MERELY A STATUTORY REQUIREMENT. NO RISK INSPECTION / NO IDENTIFICATION – INADEQUATE SUM INSURED. NO PROPER RISK COVERAGE. BENEFICIARY UNAWARE OF THE EXISTENSE OF A POLICY.

ISSUES / SPECIAL BARRIERS CLAIMS  CLAIM PROCEDURE NOT KNOWN  NOBODY TO ADVISE CORRECT PROCEDURE.  TOO MANY REQUIREMENTS Eg.: 24HRS. HOSPITALISATION, NURSING HOME DEFINITION, BILLS, RECEIPTS IN CASE OF HOSPITALISATION.

INSURERS  NO SPREAD OF MARKETING FORCE.  NO PROPER AGENCY DEVELOPMENT.  INADEQUATE TRAINING TO AGENTS.  MOFUSSIL BRANCHES NOT VIABLE.  COST OF BUSINESS PROCUREMENT VERY HIGH. TAGGING, RETAGGING, DOCUMENTATION ETC.  SERVICING OF CLAIMS IS VERY EXPENSIVE  SURVEYOR / INVESTIGATOR.

CLIENTS  DELAYED INTIMATION / MISCOMMUNICATION.  LENGTHY CHAIN – MICRO CLIENT TO BANK – INSURANCE CO. AND BACK.  INADEDQUATE / IMPROPER COVERAGE.  UNDER INSURANCE. (MORE NO. OF ANIMAL BUT COVERAGE VERY FEW).  EXPLOITAION BY MIDDLEMEN.  ELIMINATION OF FRAUDULANT CLAIMS.

SUGGESTIONS FOR IMPROVEMENT  IN ORDER TO MAKE IT VIABLE COVERAGE COULD BE SPREAD TO LARGE NO. – GOVT. MAY TAKE INITIATIVE TO MAKE CERTAIN COVERS MANDATORY AT VILLAGE LEVEL. EG. GPA, JPA, UHS, HUT ETC. – PREMIUM FOR MEDICAL TO BE RESTRICTED TO ONE DAY WAGE / TO BE CHARGED BASED ON INCOME.  CLAIM REQUIREMENTS BE AT VILLAGE LEVEL MAY BE SIMPLIFIED. WAIVER OF PM, POLICE PANCHANAMA ETC. WAIVER OF 24HRS. HOSPITALISATION, RELAXATION OF NURSING HOME.

 SEPARATE FIELD FORCE TO CANVAS FOR MICRO INSURANCE SCHEMES AND A SPECIAL MONITORING SYSTEM TO BE INTRODUCED.  INSURERS TO CONDUCT RURAL CAMPAIGNS NECESSARILY TO EXPLAIN ABOUT THE SCHEMES IN VERNACULAR LANGUAGE AND BY PUBLICITY MODES.  RURAL AGENTS RECRUITMENT MUST BE SIMPLIFIED – TRAINING TO BE RESTRICTED TO LESS NO. OF HRS – EXAM TO BE SIMPLE – ON THE JOB TRAINING TO BE MADE MUST.  AGENTS REMUNERATION TO BE INCREASED – LONG TERM PRODUCTS TO BE DESIGNED WITH SAVINGS LINK.  SPECIAL INCENTIVE SCHEMES TO BE INTRODUCED.  ADOPTION OF VILLAGE ALONGWITH BANKS / NGO ’ S TO ENLIGHTEN THE IMPORTANCE OF THE INSURANCE POLICIES.  SEPARATE SERVICING CENTRES TO BE SET-UP BY INSURANE CO. AT VILLAGE / MANDAL CENTRES.

NO LOSS NO PROFIT BASIS. ANY QUESTIONS OPEN DISCUSSION THANK YOU