. Aviva Life Insurance Company India Pvt. Ltd. mI Products and Strategies for the Indian Market Presentation by Mohammed Riaz, Aviva India

“Life is one long risk” Microfinance client in the Philippines Presentation by Mohammed Riaz, Aviva Life Insurance India

Aviva Global  World’s oldest insurance company established in 1696  Largest insurer in UK  6 th largest insurance group in the world  Aviva’s India history dates back to 1834  Ranked 35 th in the Fortune 500 list of 2005  India JV with Dabur India

Microfinance in India  Micro Finance demand is of Rs. 495 billion & the total credit supply is to the tune of Rs. 50 billion.  Approx. 75 mn. poor households are BPL or marginally above it  The varied mF initiatives touched approx. 10 mn families- Lot needs to be done

R & S Sector: An Opportunity  72% of the Indian pop. resides in rural India  Informal sector contributes to 64% of the Indian GDP  High propensity to save in rural India. Rural folks save upto 33% of their income  Insurance is a viable long term protection and saving tool  Delivering assurance through credible partnership will build trust

mI in India  mI is a value added service to the existing gamut of micro financial services  Essentially an extension of insurance services for the urban and rural poor  Channel of delivery is mainly through mFIs, NGOs, Banks, Co-operatives, ICT and SHGs  mI is livelihood protection for the underprivileged  mI is a long term capitalization opportunity

mI: Brief Statistics  Total of 83 products (42 LI and 41 Non LI products) (source: WP 2005, ILO)-this includes retail as well as group solutions  Out of the 42 life insurance products 23 are pure risk products  Most life products are designed to cover an extended contract duration (ranging from 3 to 20 years)  PSU insurance cos: still playing a predominant role in coverage of rural sector.  In , 36 million new lives has been covered by PSU as compared to 1 mn. lives by private companies

Risks covered by Insurance companies  Of all the risks covered by the companies the greatest frequency is that of life risk  Followed by Accident within which the order is Disability, Accidental Death and Accidental Expenses  Other risks covered but not very common are Health Care, Livestock and risks associated with agriculture

mI products in India Product typeAvg.S.APremium Charged Age-RangeOther Feature/s Risk Product15-20KRs yrs.NA Risk product with return of premium KRs yrs.Premium paid is returned upon completion of the policy period Guaranteed Return Products KRs yrs.Guaranteed returns are assured upon maturity of the policy Group Product40KAs per the group profile (uppermost limit) Credit cum protection plans

Rural Sector Livelihoods and Aviva Product Mix Subsistence Survivor Self-Employed Entrepreneur Affluent Group Cover Jana Suraksha Amar Suraksha Anmol Suraksha Easy Life Plus Savings Highest and in decreasing order  Aviva has designed the products according to the needs of the rural market depending on the different livelihood levels

Understanding Client Requirements To serve poor people, microinsurance must be:  Need Specific  Easy to understand  Flexible : Should provide flexibility esp. in case of credit protection  Affordable (With premiums as low as Rs. 140 for retail products our products are certainly meant to cater to the masses of the lower segments)-The A2P factor plays a very crucial role  Process for delivery is as important as the right product

Servicing clients of ml  Our mI strategy emphasizes the right products delivered through flexible processes  With regards to processes Aviva ensures that our partner has the following:  A client base with regards to bringing economies of scale  A dedicated workforce able to sell the concept of insurance to their clients  An MIS system capable of handling timely data inputs critical for insurance delivery like Premium collection, remittance, lives covered, product type  Claims documentation and administration capabilities

Aviva’s Track Record  Coverage via business partners India to name few Basix, Vimo SEWA, VWS.  Covered more than 3,60,000 lives group & individual lives thru partners  S.A to the tune of approx. Rs. 320 crores  Total claims settled are 500 plus  Claim settlement period across institutions has been an average of days

ml & Aviva  Aviva via its experience has come to believe strongly in the virtue and the potential of the sector.  Aviva leverages upon the strengths of its business partner networks to deliver ml into the hinterlands  Henceforth rural insurance business is a serious Business and Social Intervention area, with a long term perspective of the company

Improvising and Improving: Making mI more accessible Typically the value addition sought by clients is:  A better understanding of their income levels and cycles  Better understanding of the risks faced  Better understanding of their social setup and hierarchies  Simplified products that can be upgraded to their changing needs and lifestyles

mI: Need for a dedicated effort  mI is closely linked to the concept of credit in mF  mI is linked to the income and social lifecycles of the poor clientele that is serves  mI requires the delivery of structured products & process for the market capable of upgradation over a period of time  mI as a concept is thus exposed to the vagaries of unorganized sector  mI hence necessitates a separate set of attention from the quadrangle: Regulators, Insurers, delivery partners and the ultimate insured the poor clients

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