16

Sa-Dhan Patrika

Volume 7,

Issue 1, September 2006

Use of Technology for Microinsurance

Distribution: Experiences from the Field1

T

Pradesh (just an example), the impact

echnology is widely regarded as the

of the e-Choupal platform/AV vans has

solution to most problems but let us

been phenomenal in terms of reducing

not forget that it is merely a means to

cost,  and  ensuring  continuous

achieving an end. In the case of the

availability and local reach of the

microfinance sector, it promises to be a

insurance message. Likewise, Tata AIG,

good means to achieving the end goal

a life insurance company in India, has

of enhancing greater access to tailor-

similarly used AV vans in Andhra Pradesh

made financial services for low-income

to promote its insurance products to

people in a convenient manner. This

low-income people, in a friendly and

short article attempts to look at

transparent manner. A critical aspect

microinsurance within the field of

that needs to be noted here is that

microfinance and provide real-life

'marketing' of insurance is never easy

examples of how technology has been

among the rural poor, especially given

used to reduce delivery costs, enhance

the negative perceptions associated

access, and create other impacts

with  it  because  of  past  (bad)

including  better  service.  These

experiences. This is where the use of

examples are highlighted below in terms

technology has really helped insurance

of  specific  areas  of  insurance

companies and intermediaries alike, in

distribution:

ensuring a continuous presence through

Promotion/Marketing of Insurance:

a technology medium that is essentially

low-cost in comparison to its overall

Megatop Limited (an insurance broker

outreach/impact.

in India) has used the e-Choupal

platform (web-based) for promotion/

Preliminary Underwriting Work:

marketing of a large variety of insurance

products offered by several insurance

Megatop has further innovated in using

companies. Typically, the Sanchalak at

technology to overcome remoteness

each of the e-Choupals, on a specific

and  distance  with  regard  to

day or as per demand, uses the web

underwriting insurance policies. As soon

platform (in vernacular) to present to

as a proposal is received orally at the

potential farmers and low-income

village, the Sanchalak fills it out on the

people an array of products (life and

computer and sends it to the Megatop

general insurance including health,

headquarters by e-mail. From here it is

weather, asset and the like) on offer. The

dispatched (almost the same day) to

premium calculator on the web

the respective insurers who, in turn, go

immediately helps in generating various

through the proposal and send it back

A critical aspect

premium options as also other product

to Megatop with comments and/or

that needs to be

features like sum assured, bonus etc. This

acceptance, for onward transmission

noted here is that

online sensitivity analysis, apart from

(back) to the respective Sanchalak - all

'marketing' of

enhancing sheer choice and facilitating

this in record time because it is all

insurance is never

compatibility, across an array of

electronically done.

easy among the

products, has really helped enhance

rural poor,

And, indeed, the savings in time/effort

transparency in terms of detailing

especially given

and resultant impact on cost is

product features and benefits for the

the negative

phenomenal - it would easily take

low-income customer. It has also

perceptions

several days for a proposal to reach

ensured that IRDA norms and conditions

associated with it

Megatop headquarters from a remote

are met, with regard to customer

because of past

location (like Bundelkand) and, in turn,

information provision and literacy.

(bad) experiences

for the same to be forwarded from the

Megatop  also  uses  multimedia

Megatop headquarters to the insurer's

technology, whereby audio-visual vans

office. If changes are required, the time

(AV vans), travel around the villages

can be easily doubled. It would not be

and show vernacular 'flash-based'

incorrect to say that anything between

insurance movies to potential low-

two-three months may be required for

income buyers. In a remote and under-

an insurance policy to be issued to a

reached area like Bundelkand, Madhya

poor farmer in a remote location if this

1

The article draws ideas significantly from a piece of global research done by Ramesh S Arunachalam for

Enterplan (UK) and Genesis (South Africa) with regard to Distribution of Micro-Insurance (2006) as also

insights and information from partners (Megatop and Tata-AIG) of the DFID Enterplan Financial Deepening

Challenge Fund.