Rural micro insurance retailing strategy
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Rural Micro insurance Retailing Strategy. IIRM Hyderabad October 14 th Vijay Athreye. TATA-AIG Insurance Distribution in Rural Areas. Multi channel approach Agency operations in Rural areas – Regular Insurance Products

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Rural Micro insurance Retailing Strategy

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Rural micro insurance retailing strategy

Rural Micro insurance Retailing Strategy

IIRM Hyderabad October 14th

Vijay Athreye


Tata aig insurance distribution in rural areas

TATA-AIG Insurance Distribution in Rural Areas

  • Multi channel approach

    • Agency operations in Rural areas – Regular Insurance Products

    • Alternate channels operations in Rural areas – Regular Insurance Products

      • Corporate agents viz Financial Intermediaries

      • Insurance Brokers.

      • Rural Banks

    • Rural and Social channels –

      • Micro insurance and Rural Insurance products.

  • Regulation notwithstanding TATA-AIG Life views Rural and Micro insurance as an integral part of its business development activity in India

Global Micro insurance Conference Munich 10/2005


Foray into mi objectives

Foray into MI --OBJECTIVES

  • Regulator

  • YOY Growth and Industry Leadership

  • Sustainability

    • 3C Approach

  • Replicable and Scalable

  • Developmental

    • 2/3rd of Human Race.

    • PR Value

    • New and Innovative

Global Micro insurance Conference Munich 10/2005


Our strategy

Our Strategy

Socially

responsible

business

Relevant

and

Affordable

products

Low

Cost Front

end

Processes

Outsourced

Distribution

Management

Supplementary

Livelihoods

Move up from

the bottom

of the pyramid

Investment

in Grassroots

Advisor

Training

Committed

Top Mgt

And Staff

Global Micro insurance Conference Munich 10/2005


Pyramid how long

Rural 74 % Households

Urban 26 % Households

6

25

11

3

H

4

6

22

12

UM

10

18

26

23

M

LM

36

46

24

35

L

47

24

3

18

1998 – 99

1998 – 99

2006 – 07

2006 – 07

Source : NCAER

Pyramid –How Long ?

Global Micro insurance Conference Munich 10/2005


Rural services

Rural Services

Can Community

Service Providers be formed here ?

Most

Rural

Service

Providers

belong here

Poor Uptake

of Services

by Lower

Lower Middle

Global Micro insurance Conference Munich 10/2005


The product market segmentation

The Product /Market Segmentation

Banc

Assurance

ANP>

10K

Agency

Market

ANP> 5K

Brokerage

/Corporate

Agency

Market

5K<ANP< 20K

I

PSS

R and S

Rural Market 1000<ANP < 5000

PS

RP

Social Products Market ANP < Rs 1000

P

Global Micro insurance Conference Munich 10/2005


Social micro insurance product details read rs 1000 us 22

Social ( Micro insurance ) Product Details (Read Rs 1000= US $ 22)

  • Kalyan Yojana ( Five year renewable protection plan

  • Age Sum AssuredAnn.Prem..

  • 20Rs 15,000.00Rs.72.00

  • 30Rs 15,000.00Rs 84.00

  • 40Rs 15,000.00Rs 132.00

  • 50Rs 10,000.00Rs 180.00

  • 55Rs 10,000.00Rs 276.00

  • Karuna Yojana (( 15 year protection plan with maturity benefits -- Premium Rs 75 per qtr.

  • Jana Suraksha Yojana ( 15 year protection plan with maturity benefits -- Premium Rs 180 per qtr.

Global Micro insurance Conference Munich 10/2005


Micro agent model for mi retailing

Micro agent Model for MI retailing

  • Not limited to MFI’s.

  • Revenue for the NGO Partner.

  • Supp. Livelihood based

    • Developmental impact – livelihoods.

    • Target market Development– awareness ,choice etc.

    • Based on geo. Jurisdiction – bigger inclusive market.

    • Service infrastructure leveraging possibilities.

  • More compliant implementation and control for Company.

  • Social—Rural Bottom up Approach. Company can plan on long term business strategy

Global Micro insurance Conference Munich 10/2005


Public private partnership with dfid

Public Private Partnership with DFID

TATA-AIG

FDCF

Personnel

Infrastructure

Product

Training

Collateral

RO

NGO

Rural

Community

Insurance Groups

Leader +Members

Mentoring

SHG’s

Awareness

Low Income Rural Community

Mid / Higher Income Rural Market

Global Micro insurance Conference Munich 10/2005


Microinsurance summary of benefits

MicroInsurance --Summary of Benefits

  • Untapped potential. Market.

  • Poling of RISK and Law of LARGE Numbers.

  • Portfolio of profits -- Some yield more some less.

  • Experience –Scalable and Replicable.

  • Demonstration and Rub off effect.

  • Developmental

    • Arrest of Poverty perpetuation.

    • Rural Livelihoods.

      • Services Infrastructure.

    • Choices for the poor.

Global Micro insurance Conference Munich 10/2005


Results mi vs rural and company

Results MI vs. Rural and Company

Global Micro insurance Conference Munich 10/2005


Results regulatory mandate versus actual

Results Regulatory Mandate versus Actual

Global Micro insurance Conference Munich 10/2005


Challenges

Challenges

  • Sustainability and Persistency

    • Products

      • Relevant ,affordable and Profitable.

    • Personnel

      • New Breed --- Committed ,suitable.

    • Organization

      • Vision and Long term Commitment

      • Adaptability of Processes

    • Regulator

      • Policy framework.

    • Economy

      • Cascading growth

Global Micro insurance Conference Munich 10/2005


With a little help

With a little Help !!

  • Regulations on MI.

    • Type of agents.

    • Agent Licensing procedures.

    • Long tenure products (10-15 years )

    • Composite products /agents , bundling of riders etc.

  • Levellized commission structure.

  • Concept of a servicing agent.

  • TDS on small earnings.

Global Micro insurance Conference Munich 10/2005


Vijay athreye avp and national head rural and social tata aig life ins co ltd

There is fortune at the bottom of the pyramid. The key question -- how businesses can become more inclusive to reach this segment ? When rural development becomes a key business concern we should have a win-win situation !!

Vijay Athreye

AVP and National Head

Rural and Social

TATA-AIG Life Ins. Co. Ltd.


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