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