Microinsurance: Demand and Market Prospects - India

This report provides an overview of the demand and supply of microinsurance in India.

The report states that the Indian microinsuarance sector is in its infancy. Findings include:

• Demand is hard to determine due to lack of adequate studies and supply-led market penetration;
• Insurance companies provide much of their government designated quota of microinsurance to rural customers at a loss in order to be legally compliant;
• Microinsurance products on offer are not profitable;
• Low-income clients are unfamiliar with insurance, while those who are familiar with it have often had bad experiences;
• Life insurance is the most common type of microinsurance;
• Banks demonstrate strong potential as insurance partners.

The paper recommends that multilateral agencies, banks and donors assist in creating a market for microinsurance goods and services. Microinsurance providers should develop marketing and distribution methods, build awareness, develop new products that are gender-sensitive, promote reinsurance and collection of microinsurance actuarial data. Finally, the report recommends active donor involvement in establishing a microinsurance lobby.