Supporting Market Development: The Industry’s

Perspective

Arman Oza

National Insurance VimoSEWA Cooperative ltd. India

Microinsurance in Asia and Oceania Conference

Learning from the Landscape

Manila, Philippines

July 3, 2014

1 6 1

23 21

Life Non-life Reinsurance

Public Sector Private Sector

Fig. 2: No. of Insurers

34.8

5.8

13.1

4.7

0

10

20

30

40

50

60

Life Non-life

Public Sector Private Sector

Fig. 3: Gross Premium 2012-13 (USD Billion)

Brazil

Germany

South Africa

Unites States

China

South Korea

Thailand

India

0

2

4

6

8

10

12

14

16

Fig. 1: Insurance Penetration & Density

Indian Insurance Industry – A Snapshot

Source: Annual Report 2012-13, IRDA 2

-10

0

10

20

30

40

50

2002-03 2005-06 2008-09 2011-12

Life Non-life

Fig. 4: Premium Growth (%)

The Changing Face of Microinsurance

3

Individ

ual

Instt./Govt. co-

contribution

Partially

Subsidised

Fully Govt.

Subsidised

Individual

Semi-

formal

Instt.

Insurer

Govt.

CBO

Community

R

I

S

K

C

A

R

R

I

E

R

RISK

FINANCIER

Informal

Insurance

Social Security

Fig. 5: Conventional Structure

Microinsurance

Individ

ual

Instt./Govt.

co-

contribution

Partially

Subsidised

Fully Govt.

Subsidised

Individual

Semi-

formal

Instt.

Insurer

Govt.

CBO

Community

R

I

S

K

C

A

R

R

I

E

R

RISK

FINANCIER

Informal Insurance

Social

Security

Fig. 6: The New Paradigm

Microinsurance Social

Micro

insurance

Current Status of Microinsurance in India

4

• Total Coverage – 422.11 mn • Social MI coverage 311 mn • 31% growth in coverage • 49% growth in premium • 69.6% - India’s share in Asian growth

Rural & Social Sector Obligation

Microinsurance Products

Mutuals

Social Microinsurance

All figures drawn from The Landscape of Microinsurance in Asia and Oceania

Microinsurance Models

5

Subsidized Model

Voluntary Model

Compulsory Model

Governments

Insurers Insurers Mutuals/ Insurers

Mutuals / CBOs / NGOs

MFIs/ Banks

Absent

State Exchequer

Insured Members

Insured Members

MFIs / Banks

Mutuals / CBOs / NGOs

Driver

Risk Carrier

Distributor

Financier

Microinsurance Models - Features

6

Subsidized Model

Voluntary Model

Compulsory Model

Scale

Client Value

Client Value

Scale, Sustainability

Client Value

Scale, Sustainability

• Small manufacturers and large distributors. • Hybrid Models • Holistic effort on consumer education. • Common platforms for innovation. • Impact Investing.

Strengths

Limitations

Market, Policy &

Regulatory Interventions

Client Value & Utilization

Scale and Sustainability

7

THANK YOU