EBM News
EBM News

Rural-focused insurance products multiply, but awareness remains low

CHENNAI: The Covid-19 pandemic has brought to fore the importance of insurance and financial protection. Though the focus of the insurance sector in India has always been primarily urban-oriented, this time of change is pushing companies to encash the opportunity present in the heavily under-penetrated rural market.

Bima Mandi, an insurance tech startup, has chalked out an ambitious roadmap to leverage the potential that financial services in the rural market hold. According to Prashant Karulkar, founder of Bima Mandi, a large variety of insurance products that cater to the needs of farmers at affordable rates are available in the market. But due to a general lack of awareness, the rural populace has been unable to gain the benefits of these products, he pointed out.

For instance, micro-insurance products tailored for the farmers community—such as crop insurance, health Insurance, rural, personal, accident, irrigation, animal cart, aqua-culture, agri-allied and cattle insurance—are available in the market. Even niche products such as insurance covers for snake bites, livestock welfare, failed wells, damage caused by thunderstorms, health issues, funerals and even covering the birth of twins is are available, he says.

The insurance premium amount for these products start from a minimum of as low as Rs 42 per annum. Increasing awareness about the products is the key to expanding their use, Karulkar noted, which is something his start-up does through products like Bima Paathshala.  “In each state, we have assigned the state, district and tehsil incharge who will lead the awareness campaign.

The teams will educate and explain the need of insurance and how it can help assist in creating a more self-reliant and sustainable rural ecosystem at the grassroots level, “said Karulkar. Insurance outreach can be enhanced with the support of the governments too, he added.  The Insurance Regulatory and Development Authority of India (IRDAI) pegs the overall insurance cover levels for the country at 0.8 per cent or RS 1.89 lakh crore, while for rural areas, the biggest share is accounted for by crop insurance, which is pegged at Rs 32,000 crore. Karulkar also said that their interactions would be conducted mainly in regional languages in an effort to win the confidence of the people.