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Grantee
ICICI Prudential Life Insurance Co. Ltd.is a joint venture between ICICI Bank - one of India's foremost financial services companies - and Prudential PLC - a leading international financial services group headquartered in the United Kingdom. The insurer started its operations in 2000 and is the largest private life insurance company in India with one of the largest distribution networks with more than 2000 branches nation wide.
Project Summary
- Project name: Microinsurance for tribal tea plantation labourers-North East India
- Project start date: September 2008
- Duration: 2,5 years
- Country: India
Beneficiaries
Expected target groups: ICICI Prudential has selected tea tribes of Assam as the target market to launch a microinsurance product. These workers are mostly migrants from neighbouring states who have settled in Assam for generations. Their community is not recognized as ‘scheduled tribes´ under the Indian constitution and cannot therefore benefit from government benefits such as job reservation.
The tea tribes constitute about 17% of the population in Assam. Almost 50% of the tea estate workers are women who are employed to pluck tea, the most labour intensive part of tea production. The average monthly income of a household is around 2000 Indian rupees. In addition, tea estate management provides the workers with housing and subsidised rations.
Due to geographic constraints, however, basic facilities like hospitals, schools, banks, etc. are very limited. There is also very little awareness about institutionalised savings and preventive health amongst the workers. The monthly savings are nominal and mostly saved in the form of cash or unregulated schemes. Due to the lack of awareness and limited access to banks and other financial institutions, the workers tend to borrow money from local money lenders.
Expected outreach:
- During Project - Direct: 60,000 workers; indirect: 120,000 (family members)
- Potential Scale – Direct 600,000; indirect: 1,200,000
Project Description
ICICI Prudential will pilot a term life insurance with a savings component delivered to groups of tea workers through intermediary agencies. The intention is to significantly reduce transaction costs and improve customer service and overall efficiency by using technology. Intermediary agencies would be trained to create awareness, conduct sales and provide customer service.
ICICI Prudential launched its Rural Business Channel in February 2007 and has established a strong service delivery infrastructure through more than 1000 micro-offices in India. It has more than 288 rural offices to increase access and service and has been working with many Micro Finance Institutions. Based on six years of microinsurance experience, the company is reengineering its delivery systems to improve the viability of microinsurance products. The project innovates by using an online service delivery system to reduce the costs of serving low-income persons significantly. Pre-defined targets - such as reducing premiums significantly - demonstrate ICICI Prudential´s commitment to implementing strategies that make microinsurance more affordable to low-income individuals with the additional benefit of tying delivery channels more closely to both the insurer and the insured.
Key Challenges
- Geographically isolated location leading to issues such as high transaction cost, little operational control and timely and adequate customer service
- Higher morbidity and mortality risk concentration among the target segment due to limited access to public and private health delivery system, low socioeconomic status, etc.
- Low awareness of insurance amongst the target segment
Learning Agenda
- Can technology significantly improve affordability, responsiveness and transparency for low income policyholders?
- How can an insurer create a microinsurance culture amongst the working poor? What is the added value of consumer awareness?
- How can an insurer set up an effective delivery of customer service by intermediaries?
- To what extent can the proposed model be replicated to other large labour groups?
More information on the project
Website of the grantee:
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