Aviva allies with banks to improve micro insurance

Mumbai, May 13: Aviva Life Insurance, with a view to reach the micro insurance concept to the rural parts, has forged alliances with various banks.

Aviva has forged alliances with the Canara Bank, Lakshmivilas Bank, Punjab and Sind Bank, and 23 cooperative and regional rural banks.

It has introduced both group and individual schemes and other special products like ''Jana Suraksha'', ''Amar Suraksha'' and ''Anmol Suraksha'' with low premiums. Aviva has so far covered over seven lakh social lives.

The past decade has seen the growth of micro insurance in many different countries. Sri Lanka, Philippines, and other nations allow NGOs and people's organizations to register themselves as micro insurance companies or cooperatives. They have permission to sell their own policies and are allowed to reinsure with one of the large global companies like Swiss Re or Munich Re.

There is a growing realization of provision of additional innovative micro financial services apart from credit and savings, an Aviva spokesperson said. Micro insurance is a relatively new service that is being offered along with credit and savings for providing more elaborate and complementary set of services to the underprivileged, he added.

Savings and emergency loans, though critical, address only relatively simple life cycle events and minor emergencies. Risks associated with larger issues like healthcare financing, deaths and property loss require a greater level of support, and micro insurance helps reduce the vulnerabilities.

The concept of micro insurance works well in the rural as well as the urban areas. The target audience for micro insurance include self-help groups, farmers, small-scale entrepreneurs, migrants and tribals.

The IRDA policy directive to private insurers to have a fixed percentage of business in the rural and social sectors has somewhat helped penetration of micro insurance. The IRDA is also in the process of developing regulations for micro insurance to facilitate growth and control the entry of non-serious players, the Aviva spokesperson said.

UNI