ns ran e in ndia 13.7
funded health insurance schemes are 13.1 company Aviva Life Insurance (in
per cent in rural areas and 12 per cent in partnership with MFIs) which has forged
urban areas (Economic Survey 2015–16). alliances with banks like Canara Bank,
(iii) After the general insurance industry was P&SB, RRBs, 23 cooperatives, etc., to
opened up (2000) for the private sector promote micro finance.
participation, the experience has been Micro insurance has evolved in the past
positive.12 Its growth compares favourably two decades of research in micro finance
with that of many other emerging markets and has seen growth in countries like Sri
and is in line with global benchmark of Lanka, Philippines in the last decade.16
two to three times the growth in GDP.13 Here NGOs and people’s organisations
As the economy is on a strong growth are allowed to register themselves as
path and the capital expenditure planned micro insurance companies which sell
across industries is estimated to be over such insurance. As they cover the risk
Rs. 9,00,000 crore over the next four to themselves, they are allowed to reinsure
five years, a better scope for the general with one of the large global companies
insurance expansion is probable.14 The like Swiss Re or Munich Re. Same model
growth in both commercial and personal is suggested for India but for this to
lines of general insurance business reflects happen drastic changes in the existing
positive trends. Over 70 per cent of India’s insurance rules are required.17
population lives in rural areas and along (v) Many of the experts believe that insurance
with organised financial services, general industry should benefit the insurers,
insurance companies are also expanding reinsurers as well as the insured. The
into these sectors. social purpose of the insurance sector is
(iv) People in their lives experience financial never praiseworthy to be marginalised by
difficulties that can affect the entire the corporate interests (be domestic or
family negatively, this is more true about foreign)—at least it does never taste good
the poor masses in India. in India which needs a strong social safety
This is why experts suggested for the net.18
provision of micro insurance. A relatively (vi) Almost all of the private insurance
new concept, micro insurance is today companies in India have been demanding
provided to the beneficiaries of micro that the government-owned insurance
finance covering the finance amount, companies (i.e., LIC and the four
reducing the risk of the clients as well as general insurance companies) should be
the micro-finance institutions (MFIs).15 converted into private sector companies.
The concept of micro insurance has Their reasons are logical as in comparison
been developed by the private insurance 16. Ibid.
17. It has been beautifully shown taking example of the
12. Sandeep Bakhshi, CEO & MD, ICICI Lombard General
Self-employed Women’s Association (SEWA) by
Insurance Company, Mumbai, Survey of Indian
Renana Jhabvala and Ravi Kanbur in the Kaushik Basu
Industry 2007, The Hindu, p. 99.
(ed.) India’s Emerging Economy, (New Delhi: Oxford
13. Ibid. University Press, 2005), pp. 309–110.
14. Ibid. 18. Biplab Dasgupta, Globalisation: India’s Adjustment
15. Vivek Khanna, Director, Aviva India, Survey of Indian Experience, (New Delhi: Sage Publications, 2005),
Industry 2007, The Hindu, p. 102. pp. 221–31.