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_at_˳ÏÁRV
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Access to Insurance for the Poor
by the Poor
of the Poor
District Rural Development Agency, Andhra
Pradesh, India
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Structure

• What is Indira Kranthi Patham

• Core Beliefs

• Institutional model

• Activities

• Community Managed Life Insurance

District Rural Development Agency, Andhra
Pradesh, India
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Indira Kranthi Patham
What is Indira Kranthi Patham

• Indira Kranthi Patham is rural poverty
  alleviation project under implementation in the
  State of Andhra Pradesh (India) since October,
  2000

• It is a Community Driven Development project

• The fundamental building blocks of the strategy
  are

• Facilitate Empowerment

• Improve Opportunities

• Increase Security

District Rural Development Agency, Andhra
Pradesh, India
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Indira Kranthi Patham
Our Core beliefs

• Each poor family has the inherent potential and
  strong desire to come out of poverty

• The poor require participatory institutions of
  their own to unleash this potential

• There are committed people among the poor
  Social Capital who are willing to sacrifice
  their effort and time to help the other poor

• There is a need for a sensitive support mechanism
  for nurturing the institutions of the poor and
  facilitate social mobilization

District Rural Development Agency, Andhra
Pradesh, India
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Social networks of the rural poor women

• E.C - 2 from each V.O, 5 Office bearers
• Support to VOs
• Secure linkage with Govt. Depts,
• fin institutions, markets
• Auditing of the groups
• Micro Finance functions

ZS
MMS 4000 - 6000
910 MS

• E.C - 2 from each S.H.G, 5 Office bearers
• Strengthening of SHGs
• Arrange line of credit to the SHGs
• Social action
• Village development
• Marketing and food security
• Support activists

V.O 150 - 200
28080 VOs

• Thrift and credit activities
• Monitoring group performance
• Group level poverty
• reduction plans
• Household inv plans

476930 SHGs
6.9 million families
10 - 15
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Indira Kranthi Patham
Activities

• Access Commercial loans from Banks

• 266 million in 2004-05

• 445 million in 2005-06

• 778 million in 2006-07

• Community Managed food security

• Marketing support to Members

• Social Action

• Health and Disability interventions

• Community Managed insurance

District Rural Development Agency, Andhra
Pradesh, India
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Indira Kranthi Patham
Designing Abhaya

• Group Insurance was the best option

• Voluntary enrollment

• Premium must be affordable and attractive

• Outsource risk while retaining control over
  policy administration

• Minimize time gap between premium collection and
  start date of coverage

• Do away with cumbersome claim documentation

• Provide services at the doorsteps of the insured
  family

• Establish Zilla Samakhyas credibility with the
  Insurer and the insured

District Rural Development Agency, Andhra
Pradesh, India
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Abhaya
Premium _at_ 65 (USD 1.4) per head collected Premium
_at_ 50 (USD 1.1) per head paid to LIC
Sum Insured

• Natural Death Rs.30,000 (USD 666.66)
• Accidental Death Rs.75,000 (USD 1666.66)
• Total permanent disability
• due to accident Rs.75,000 (USD 1666.66)
• Loss of One Eye/Leg/Hand
• due to accident Rs.37,500 (USD 833.33)

District Rural Development Agency, Andhra
Pradesh, India
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Indira Kranthi Patham
Comparative advantages
Insurer
CBOs

• Provide risk cover

• Enrollment

• Training of CBOs

• MIS

• Claim Settlement

• Claim documentation

• Part settlement within
• 48 hours

District Rural Development Agency, Andhra
Pradesh, India
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Insurance and Social networks of the poor

• Tie up with an Insurance Company
• Nodal Agency for the scheme
• Maintain data base and Call Centre
• Issue Certificate of Insurance
• MIS
• Capacity building of its staff and community
• Pay out solatium within 48-72 hours

ZS

• Planning and Monitoring
• Training of VOs
• Claim docuementation
• Office bearer is member of Area Committee

MMS 4000 - 6000
2006-07 1st year 126150 Lives insured

• Member education
• Enrollment
• Collection of premium
• Reporting claims
• Facilitate documentation of claims

VO 150-200
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Insurance and Social networks of the poor

• Tie up with an Insurance Company
• Nodal Agency for the scheme
• Maintain data base and Call Centre
• Issue Certificate of Insurance
• MIS
• Capacity building of its staff and community
• Pay out solatium within 48-72 hours

ZS

• Planning and Monitoring
• Training of VOs
• Claim docuementation
• Office bearer is member of Area Committee

MMS 4000 - 6000
2007-08 2nd year 336116 Lives insured

• Member education
• Enrollment
• Collection of premium
• Reporting claims
• Facilitate documentation of claims

VO 150-200
78 Renewal rate
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Abhaya
Claim Settlement Process
Phone
Call Centre located in ZS
Claim village
Phone
Payment of Solatium to the nominee
Rs.5000/-
Area Committee consisting of Community Members
Visit
ATM

• Area Committee completes claim documentation
  and sends to LIC via Abhaya
• Call Center

District Rural Development Agency, Andhra
Pradesh, India
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Total lives 126150 Claims as on 01.05.07

• Death Claims received - 646

• Claims accepted - 617

• Claims rejected - 29

• Natural Death - 591

• Accidental Death - 26

• Disability Claims - 39

• Solatium paid (Rs.5000/-) - 612

• Claims sent to LIC - 564

• Claims settled by LIC - 484

• Claims settled by ZS - 484

District Rural Development Agency, Andhra
Pradesh, India
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Indira Kranthi Patham

• CBOs can reach out faster and in a more credible
  manner

• Enrollment in both years completed in 20 days

• Low cost of administration Rs.6-8 per policy(USD
  0.17)

• Use of IT makes claim administration efficient
  and effective

• CBOs retain control over the policy and hence
  improve the acceptance levels by the poor

District Rural Development Agency, Andhra
Pradesh, India
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Indira Kranthi Patham
When community-based organizations are
responsible for project design, management, and
monitoring, costs per beneficiary are
dramatically less, results are better, and
benefits are more sustained
District Rural Development Agency, Andhra
Pradesh, India
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Thank you