Micro-insurance penetration in India is not satisfactory. Moreover, it has not been able to reach the right people. We are talking about people with small, irregular incomes. I will definitely do something about it. Currently, we have imposed rural and social sector obligations wherein targets in terms of number of policies to be written in the rural sector in accordance with the years of their operations and also certain quantified target for coverage of lives in the social sector are specified. According to regulations, all micro-insurance products may be accepted for the purpose of fulfillment of the social obligation and where such policies are issued in rural areas, they could also be taken to fulfill rural sector obligation.
However, we need to revisit the strategy, the design and the very definition of micro-insurance. The products must be simple, affordable and easily accessible. Currently, micro-insurance products are defined in terms of benefits, but it?s meant for the poor and it should be defined in terms of payouts but with certain exclusions. It may also be a good idea to make flexibility in premium collection mandatory because that?s emerged as a huge roadblock in the popularisation of the micro-insurance products. Some more thinking needs to go into it.
