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Micro InsuranceAn Approach to Serve the

Poor

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Low – income groups are invariably exposed to innumerable risks. Micro insurance works on the phenomenon of risk transfer mechanism characterized by low premiums and low coverage limits.

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Introduction Risk protection Low premiums and low coverage limits Contribution to economic and social

inclusion

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Need for Micro Insurance

Low income household are predisposed

To protect themselves and their families against different risks

Poor need to be seen as a market Developed countries and Developing

countries New concept for the bottom of pyramid

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Characteristics of Micro Insurance

Group insurance schemes Women’s associations, saving and

credit groups, cooperatives and the like

Flexible mode of premium payments

Distribution channel

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Products Life micro insurance

Health micro insurance

Disability micro insurance

Agriculture micro insurance

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Opportunities

Potential area growth and development by insurer and practitioners

New distribution channel Self-employed Public and private insurance player

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Challenges Transaction cost

High administrative cost Distribution systems

Distribution systems of most insurers not designed to serve low income market

Products Absences of exclusive products

Regulatory Environment Require new regulatory environment

Customer Education and Awareness Reinsurance

In order to minimize the risk Fraud

Customer and channel partners

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Conclusion

Poor no longer consider as non bankable

Subset of microfinance Combination with savings and

micro credit

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Thank you…