Insurance companies should target rural India by offering innovative and affordable insurance schemes. There are approximately 200 million rural individuals with surplus income available to invest in savings options. Introducing schemes with premiums between Rs. 500 to Rs. 1000 per month could attract many rural customers, especially youth, and generate over Rs. 1000 crores in new assets for insurance companies. Insurance is an underpenetrated market in rural areas, with only 8-10% of households covered, so there is significant potential for growth by designing products that meet the needs of rural communities.
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Insurance companies should target rural India by offering innovative and affordable insurance schemes. There are approximately 200 million rural individuals with surplus income available to invest in savings options. Introducing schemes with premiums between Rs. 500 to Rs. 1000 per month could attract many rural customers, especially youth, and generate over Rs. 1000 crores in new assets for insurance companies. Insurance is an underpenetrated market in rural areas, with only 8-10% of households covered, so there is significant potential for growth by designing products that meet the needs of rural communities.
Insurance companies should target rural India by offering innovative and affordable insurance schemes. There are approximately 200 million rural individuals with surplus income available to invest in savings options. Introducing schemes with premiums between Rs. 500 to Rs. 1000 per month could attract many rural customers, especially youth, and generate over Rs. 1000 crores in new assets for insurance companies. Insurance is an underpenetrated market in rural areas, with only 8-10% of households covered, so there is significant potential for growth by designing products that meet the needs of rural communities.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online from Scribd
Insurance companies should target rural India by offering innovative and affordable insurance schemes. There are approximately 200 million rural individuals with surplus income available to invest in savings options. Introducing schemes with premiums between Rs. 500 to Rs. 1000 per month could attract many rural customers, especially youth, and generate over Rs. 1000 crores in new assets for insurance companies. Insurance is an underpenetrated market in rural areas, with only 8-10% of households covered, so there is significant potential for growth by designing products that meet the needs of rural communities.
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INSURANCE COMPANIES SHOULD
CONCENTRATE RURAL INDIA
Submitted by TheIndiaStreet on July 12, 2008 - 9:12am.
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% ASSOCHAM brought out a paper on `Rural India and Its New Investors’ and emphasized the importance of rural investments in insurance sector % Insurance companies can add Rs.1000 Crores Assets to their Networth from Rural Folks % 200 million rural population out of 700 million have the surplus money to save money in their available options of post offices and extension counters of commercial banks. % Insurance companies should concentrate on these rural areas by offering innovative schemes with affordable premiums
ASSOCHAM brought out a Paper on `Rural India and Its New Investors’ by its President, Mr. Sajjan Jindal, on Thursday 3 July 2008 for emphasizing on the investment of rural people on different schemes. However, it adds that insurance companies can lure this investors lot even for agriculture, housing, personal, education and auto loans after these have insured them under its new schemes.
There are nearly 200 million rural folk that are looking for alternate savings channels for their surpluses. Insurance companies come with new schemes to take this opportunity by giving innovative schemes at affordable premium.
Mr Jindal, President, ASSOCHAM said that currently, the rural folk relies more on post offices and various extension counters and branches of commercial banks to save their surpluses in the absence of other suitable savings channels. Nearly 200 million rural investors as per information received by the ASSOCHAM is looking for other safer savings channels for higher returns on their investments and insurance companies could prove to be the best and viable option for them.
As per estimates of ASSOCHAM, over 700 million rural population lived in India’s villages out of which approx. 200 million rural populace have reasonable per capita income due to their double income from agriculture and non-agriculture sources.
At present 8-10% rural households are covered under life insurance schemes and remaining 90% can be targeted for new innovative insurance schemes. Rural investments are limited to their available option post offices and a few limited commercial banks rural extension counters.
The paper further explains that a good number of rural investors are also aspiring to become self reliant but lack avenues for credit in areas for food processing, better horticultural and agricultural facilities, training for skill development to process their milk etc.
The public and private insurance companies can also introduce affordable insurance schemes with their premium keeping at Rs. 500 to Rs.1000 per month. With this premium, the companies can design schemes that can cover rural youth for at least Rs.50,000-Rs.1 lakh for a period of minimum 10 years.
ASSOCHAM has therefore felt that this is the opportune time for the public and private insurance companies to enter into rural India in a big way by introducing easy premium schemes in life insurance and for agri insurance, auto insurance etc.
ASSOCHAM has suggested that the insurance companies should interact with local government/development agencies, as well as Panchayats and identify various products for the preparation of the Service Area Credit Plans in the rural areas.
The insurance companies can offer loans to the rural areas for renovation and modernisation of their housing at 6-7% rate compared to 10-12% rate in urban India. personal loan at affordable rate will be an ideal choice for them. Insurance companies can also concentrate on personal loans at affordable rate will be an ideal choice for them. Rural masses are seeking large sums for the marriages in their families and other close relations and
Insurance companies can target rich farmers for auto loans and the repayment of these loans with 6-7 years period and with easy interest rates. Rich farmers who have benefitted from agriculture, farming, dairy processing & other sectors are using tractors, jeeps, tempo etc. for loading and unloading their crops and other products to traders.
There are nearly 20% of farmers having Kissan Credit cards. The 25-30 million credit cards database offers tremendous growth opportunity for insurance companies. An extensive rural agent network for sale of insurance products could be established. The agent can play a major role in creating awareness, motivating purchase and rendering insurance services. Insurers should develop viable and cost-effective distribution channels, build consumer awareness and confidence. India is an agrarian economy and there are immense opportunities for the insurance companies to provide the liability and risks associated in this sector.
