Rural Insurance Scenario

1 / 16
About This Presentation
Title:

Rural Insurance Scenario

Description:

Rural Insurance Scenario A Research based presentation By : Naren N. Joshi Chief Representative ING Insurance International B.V. Venue : 19 October, 2004 – PowerPoint PPT presentation

Number of Views:127
Avg rating:3.0/5.0
Slides: 17
Provided by: NITI74
Learn more at: http://www.dhan.org

less

Transcript and Presenter's Notes

Title: Rural Insurance Scenario


1
Rural Insurance Scenario A Research based
presentation
By Naren N. Joshi Chief
Representative ING Insurance
International B.V.
Venue 19 October, 2004 FICCI 9th
Conference on Insurance New Delhi
2
Rural Insurance Research
  • FORTE- A collaboration between FICCI and ING
    Insurance, has conducted two research studies to
    understand the realities of the rural insurance
    market space
  • Macro Level Study conducted through MART
  • Rural Insurance Issues, Challenges
    Opportunities
  • Micro Level Study conducted through James
    Martin Co
  • Developing a Rural Distribution Strategy for
    Insurers

3
Macro Study
Objectives of the Research
  • Understand rural customers current knowledge,
    attitudes and practices regarding savings, loans
    and insurance
  • Identify existing factors, if any, prohibiting
    the purchase of insurance policies
  • Profile potential rural customer segments in
    terms of attitudes, behavior and demographics 
  • Develop a broad, cost effective distribution
    strategy

4
Macro Study
Key Findings of the Research
  • Rural sector offers a huge business opportunity
    for insurance companies
  • Savings ratio is a healthy 30 of income across
    all socio economic segments
  • Awareness about Life Insurance is near universal
  • 27 of CWEs already have a life policy
  • 51 of all respondents have expressed intention
    to purchase a life policy
  • There are a total of 124 million rural households
  • Nearly 20 of all farmers in rural India own a
    Kissan Credit Cards. The 23 million credit cards
    issued till date offer a huge data base and
    opportunity for insurance.

5
Macro Study
Key Findings of the Research (contd.)
  • Delivery infrastructure in the form of District
    Cooperative Banks, Cooperative Societies, NGOs
    and Self Help Groups already exists in most
    villages.
  • Rural connectivity through IT.
  • E-choupal of ITC and other similar initiatives
    are available as additional delivery channels of
    insurance
  • An extensive rural agent network for sale of Life
    insurance products exists
  • The agent plays a major role in creating
    awareness, motivating purchase and rendering
    other insurance services

6
Macro Study
Key Findings of the Research (contd.)
  • 78 of respondents prefer various combinations
    of life insurance like life accident, life
    loan, life health accident.
  • Flexibility in Premium payments is important.
  • Security of income and bulk returns, especially
    for daughters marriage and childrens education
    are major persuasions for taking life policy.
  • While individuals are undecided about purchasing
    insurance from private players, members of
    different groups are favorably disposed to
    purchasing group insurance through a private
    player vetted by the group Herd mentalitySafety
    in numbers.

7
Macro Study
Complementary Delivery Systems
Name of the institution/ instrument Accessibility/ coverage of each branch Rural presence/ penetration
Regional Rural Bank 15-20 villages 5000 pop size village
Commercial bank (Rural Branch) 5000 account holders spread over (35-40 villages) 5000 pop size village
Post office 5-6 villages 2000 pop size village
Cooperative society 10,000 members spread over 20-25 villages 5000 pop size village
ITC E choupal 5 to 7 villages Prosperous village
District cooperative bank 7500 accounts Block head quarter
Kissan Credit Card 12 of total no. of farmers in rural area Farmer of any village
E-choupals manned by a Sanchalak provided
with computer and internet connectivity for
procurement of agri produce and giving
information on variety of services to villagers.
8
Micro Research Study
9
Micro Study
Study Phase
  • Develop a comprehensive description of available
    channels and their delivery capabilities in the
    context of rural insurance potentials
  • Identify and understand the concerns of insurers
    and their strategies for facing the challenges
    that rural market presents
  • Develop an Evaluation Framework as a basis for
    selection, design and operationalisation of
    distribution channels
  • Primary research in the Muzaffarnagar District of
    UP for the feasibility of each available channel
    applying evaluation criteria
  • Develop an activity based cost model to
    profitably operationalise the feasible channels

10
Micro Study
District Muzaffarnagar - Span of a Block
District
Per Block
Tehsils
Blocks
8
Panchayats
74
Villages
11
Micro Study
Distribution Channels
Available Channels
Evaluation Criteria
Feasible Channels
Reach
Influence on target segment
Trust reliability
Business acquisition capability
Support requirements
Financial transaction handling
Operational discipline
E-Bima
Customer servicing
New Channel
12
Micro Study
Suggested Strategy Model
DISTRICT COORDINATOR (1)
Insurers Resources
BLOCK COORDINATOR (14)
Coop Bank
Panchayats
Cooperatives
Agents
E-Bima
3
8
5
20
1
No of Channel Units per Block
Av. No. of Agents per LIC Dev Officer 37
13
Micro Study
E-BIMA
  • Infrastructure
  • A Van
  • A Simputer with a Printer
  • Video-Audio Facility
  • Human Resources
  • One Driver
  • Two sales cum administrative staff / agent
  • Site and Mode of Operation
  • Moves Village to Village
  • Parks at Panchayat, Local School , Village
    Chaupal
  • Visits 2 Villages and one haat a day
  • Works 8 Hours a day

14
Micro Study
Role and Benefits of E-BIMA
  • Role
  • Awareness Programmes
  • Relationship Building and Management
  • Business Acquisition
  • Policy Servicing and Business Retention through
    Premium Collection facilities
  • Other Benefits
  • Support to other Channels for Policy Servicing,
    Premium Collection, Policy Query Handling,
    Complaint Handling, Assistance in Claim
    Processing
  • Overcome limitations of channels

15
Take Away
  • The rural market offers tremendous growth
    opportunities for insurance companies but their
    success will depend upon their ability to
  • Develop viable and cost effective distribution
    channels and
  • Build consumer awareness and confidence
  • ING is one of the few private insurance companies
    highly committed to the rural insurance market in
    India . In fact, ING is currently running a pilot
    project in rural India.

16
THANKS
Write a Comment
User Comments (0)