The rural insurance initiative of Tata AIG is being financially supported by the Financial Deepening Challenge Fund (FDCF) set up by the British governments department for international development (DFID). In India, the fund is currently only operational in Andhra Pradesh and Madhya Pradesh.
This fund will help in micro-insuring the lives of landless daily waged rural poor in the state of Andhra Pradesh. As per this agreement, FDCF will be contributing 89,500 (Rs 65 lakh) while Tata AIG will contribute 104,000 (Rs 75 lakh), thus taking the total corpus for Project Micro Insurance to 193,500 (Rs 1.4 crore). This is in addition to the ongoing initiative of spreading rural insurance in the states of Tamil Nadu and Karnataka through the strategic tie-up with the bridge foundation.
Said Tata AIG country head Sunil Mehta: We believe that the benefits of insurance must be within reach of every Indian, irrespective of his or her purchasing power. AIG is extremely serious about community development and rural spread in this country. The micro-insurance project reinforces our commitment to India and the rural sector in particular.
The micro-insurance project includes spreading of insurance awareness among the economically and socially backward sections of rural AP, developing a cost effective rural insurance delivery and servicing channel and encouraging investment through insurance to provide for education in the target market.
Tata AIGs foray into rural insurance is marked by a 11 per cent contribution (as against the 5 per cent obligatory requirement) to overall sales from the rural markets in its first year of operations (2001-02). In 2002-03, Tata AIG surpassed its rural/social sector obligation by notching 10 per cent contribution to its overall sales.