Submitted To:

Faculty Guide: Ms. Harshita Samrani Mr. Divyesh Patel

Submitted To:
GUJARAT TECHNOLOGICAL UNIVERSITY, AHMEDABAD Submitted By: 1) Kamlesh T Gadher Roll No: 11 MBA (Finance) Batch 2009-11 2) Ankur J Patel Roll No: 30 MBA (Finance)

‡ This project report entitled as ³Comprehensive Project Report on Micro-Insurance´ submitted to the Indu Management Institute, Ankodiya in the fulfillment of requirement for Master of Business Administrator (MBA) degree has been completed by us under the guidance of Ms. Harshita Samrani and Mr. Divyesh Patel. ‡ We hereby, Kamlesh Gadher & Ankur Patel, giving assurance that the Grand project is done with our sincere efforts & our own observations. We have completed the project on our own efforts & not try to make any duplication. Place: Vadodara Date: 30/05/2011

NO TITLE 1 Introduction 2
3 4 5 6

PG NO. 6 16

Objective Of Study Research Methodology Analysis Findings Recommendation & Suggestion Conclusion Bibliography

33 34

7 8

35 36

What Is Micro Insurance?:

History & Mission:

Delivery Models

What Is Micro Insurance?
‡ Micro Insurance is a insurance products that offer coverage to low-income household. ‡ A micro insurance plan provides protection to individuals who have little savings and is tailored specifically compensation for illness, injury , or death. ‡ Micro insurance is often found in developing countries, where the current insurance market are inefficient or non existing. ‡ Micro-insurance policies protect the poor against risks of death or disability and protect key assets the family relies on to provide income and stability. This new type of insurance is mainly offered in the poorest region of the world.

History & Mission: 

The Micro Insurance Agency has its roots within Opportunity International, a large microfinance network motivated by Jesus Christ¶s call to serve the poor. With a network of 47 microfinance institutions, Opportunity International has been serving the entrepreneurial poor since 1971. In partnership with Opportunity¶s microfinance institutions, it began working in 2002 on the development of a range of life, property, livestock, crop derivative, disability, unemployment and health insurance products to cover the risks faced by Opportunity¶s loan clients. 

In 2005, the Micro Insurance Agency was founded by Opportunity International as a fully-owned subsidiary capable of offering insurance products and services to a wide range of customers.  Its mission is to empower the materially poor to transform their lives by insuring them against financial risk and its consequences. Specifically, it seek to serve the economically active poor who live on $4 per day or less in developing countries and provide a safety net to reduce economic setbacks.

‡ A micro-insurance agent/company shall be appointed by an insurer by a deed of agreement or memorandum of understanding which should clearly specify the terms and conditions,. He shall work either for one life insurer or for one general insurer or for one life insurer and one general insurer; and his function are: Collection of proposal forms; Collection of self declaration from the member that he is in good health; Collection of monies for issuance of contract or remittance of premium; distribution of policy documents; Assistance in the settlement of claims; Nomination; and The micro-insurance agent or the insurance company shall have the option to terminate the agreement/ after giving a notice of three months.


‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

Delivery Models

1. Partner Agent model: 2. Full Service model: 3. Provider-driven model: 4. Community-based/mutual model:

1. Partner

Agent model:
Insurance Company(Partner) 1) Product Design 2) Long term Stability ‡ Agent(NGO) 1) Product marketing 2) Product Service Client

formed between the micro-insurance scheme and an agent (insurance company, microfinance institution, donor, etc.), micro-insurance scheme is responsible for the delivery and marketing of products to the clients the agent retains all responsibility for design and development



Benefit: ‡ Limited Risk. ‡ lowers the cost of distribution and thus promotes affordability.  Disadvantage: ‡ limited control.

2. Full Service Provider model

Delivered ( Health NGO) 1) Product design 2) Product marketing 3) Product Servicing


External institution

‡ The micro-insurance scheme is in charge of everything; both the design and delivery of products to the clients. ‡ external healthcare providers provide the services.  Benefit: offering micro-insurance schemes full control.  Disadvantage: Higher risks

3. Provider Driven Model
Healthcare Provider 1) Product design 2) Product marketing 3) Product Servicing 4) Ensuring Long Term Stability


Banks and other providers of microfinance can directly offer or require insurance contracts. These are usually coupled with credit, for example, to insure against default risk.
Benefit: widely in the general insurance market Disadvantage: High transaction costs and low ability to pay premiums

4. Community Based Model


‡ The Policy holders or client are in charge, managaging and owning the operations, and working with External healthcare providers to offer services. Benefit: ‡ This model is advantageous for its ability to design and market products more easily and effectively Disadvantages: ‡ small size and scope of operations.

1. Life Insurance 2. Health Insurance 3. Property Insurance 4. Disability Insurance 5. Crop Insurance 6. Disaster insurance: 7. Unemployment Insurance 8. Reinsurance

‡ ‡ To understand what Micro-Insurance is? To find the awareness of micro insurance among Rural group of people in Vadodara (Gujarat). To recognize the Potential Market for Micro-Insurance in vadodara.


‡ ‡ Meaning and concept of Micro-Insurance. The area which was selected for the survey is bounded by central sub- urban of Gujarat State. (vadodara) Conducted unstructured interviews sample size of 100 general people having income less than Rs. 350 per day.


‡ Data collection was very time consuming. Hence the sample size is very small.

DATA COLLECTION 1. Primary Data: The primary data were collected through well-designed and structured questionnaires based on the objectives. 2. Secondary Data: The secondary data required of the research was collected through various newspapers, and Internet etc. SAMPLING:

Sampling Universe: Baroda Sampling Size: 100 resident of Baroda

Data Analysis: Presented in form of graphs and tables.

Age Group
45 40 35 30 25 20 15 10 5 0 Below 25 25-35 35-45 More Than 45






45 40 35 30 25 20 15 10 5 0 Up To S.S.C H.S.C Graduate Post Graduate


30 21


Awareness of Micro Insurance


Yes No

Sources of Information Television
14 41 18

Newspaper Company Agent Other


Holder Of Policy
90 80 70 60 50 40 30 20 10 0 Yes No




Company of Micro-insurance Policy
12 6 6 LIC ICICI Kotak Mahindra Life insurance Others 76

View Of Respondents
60 50 40 32 30 20 12 10 0 Yes No May be Number of respondents 56

Payment Method
9 9 23 Annual Semi annually Quartely Monthly 59

Premium Of Respondant
50 45 40 35 30 25 20 15 10 5 0 47 35

Number of respondents 12 6

Less than 1000-2000 2000-3000 More than 1000 3000

Respondent's Preference

16 35 7

Death Benefit Children¶s Future Retirement Planning Tax Planning



Type of Policy

27 Only Unit Linked Only Traditional Both



Investment View
17 9


Mutual Fund Insurance Post Office Bank Deposit Other

3 46

Respondent view
8 11 23 Premium Return Safety Liquidity Market Condition



80 70 60 50 40 Respondents 30 20 10 0 Yes No 24 76

‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡

Income level lies between 150-350 bugs per day. Majority of respondent had bank account and very less had both post office as well as DMAT account. Majority of respondent having earning is more than 60000 par annual.

Majority respondents are ready to invest annually more than 5000 Rs. for investment in insurance All of them are aware about insurance but not about micro insurance and best source of information medium found to be newspaper, television and from friends & relatives. Many of respondents were not insured just because of either high premium or lack of complete information. Respondent has more focus on return of its investment in micro-insurance policy 

Simplifying and making premium payment plans flexible to suit the needs. 
Focus on volumes by targeting large groups.  Innovations are required at all stages for products, in pricing policy and in delivery channels  Success of marketing micro insurance depends on understanding the social and cultural needs of the target population  Integrating micro finance activities with micro insurance for a most beneficial outcome.  Claim settlement to be timely, simple and transparent.

‡ Micro Insurance is designed keeping in mind to poor people. Like everybody else, the poor people face a variety of risks such as risk of death, illness, disability, accident, income & property & so on. Like all other, they also need to be protected from these risks. ‡ Policy-induced and institutional innovations are promoting insurance among the low-income people who form a sizable sector of the population and who are mostly without any social security cover. ‡ Although the current reach of micro-insurance is limited, the early trend in this respect suggests that the insurance companies, both public and private, operating with commercial considerations, can insure a significant percentage of the poor. ‡ insurance regulator (IRDA) is helping all insurance companies appreciate the vast untapped potential in serving the lower end of the market. ‡ It is becoming increasingly clear that micro-insurance needs a further push and guidance from the regulator as well as the government.

± K.R. Ratan Micro Insurance IGNO publication 2008 pp87. ± Banking & Insurance II (Thakur Prakashan).

Journal :
± IRDA journal 2007 Focus Micro Insurance

Website: Articles: Concept Paper on Need for Developing Micro-Insurance in India

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