Connectivity , Co-operative & Collaborative ( 3C ) – The way forward for Rural Insurance penetration.

Our nation is currently commemorating Amrit Kal with the goal of transforming India into a developed nation by the conclusion of 2047, which marks the centenary of our independence. In alignment with the government's vision, the insurance industry regulator, IRDAI, and the insurance industry itself are also committed to pursuing this objective. As discussed in previous sections, the development of India hinges on elevating the rural sector to a developed status. Consequently, the industry is resolute in its determination to provide the benefits of insurance to the country well in advance.

Regulatory authority IRDAI in its vision “Insurance for All by 2047” aims that every citizen has an appropriate life, health and property insurance cover and every enterprise is supported by appropriate insurance solutions.

Recent experiences have underscored the necessity of implementing a multifaceted approach to ensure comprehensive insurance coverage in rural areas & in this context 3C model i.e "Connectivity, Co-operative, and Collaborative “ could be the way out to increase the rural insurance penetration.

Connectivity :? In today's work environment, it's impossible to envision any progress without the utilization of internet and mobile connectivity. The pace of developments is rapid, and the government is deeply committed to ensuring that every village is connected to the internet. The Ministry of IT has already initiated the installation of optical fibre cables, and it is anticipated that very soon, all villages will have internet access. Furthermore, mobile technologies such as 4G have already been deployed, and discussions are underway regarding the implementation of 5G and 6G networks. This increased connectivity has significantly transformed the operations of insurance companies, enabling them to use it for product launches, policy sales, customer service, and even claims processing. Additionally, digital channels like CSCs and PoSP will continue to play a crucial role in strengthening these capabilities further.

Cooperative Institutions :? Rural India encompasses vast expanses, boasting a robust network of cooperative societies within its rural areas. When utilized effectively, these cooperatives hold significant potential to benefit their local communities. Recently, the Central Government has taken steps to enhance this cooperative landscape by establishing a Ministry of Cooperatives and allocating a budgetary support of Rs 6500 Crores for the improvement of IT infrastructure within these operating societies. It is explicitly stated that these village-level cooperative societies will be strengthened, enabling them to offer financial services, including insurance. One can envision a scenario where over 65,000 cooperatives/PACSs transform into insurance sales and service units. Such a transformation would revolutionize the entire setup, making insurance services readily accessible in rural villages, all in a fully digital format.

?

Collaborative? Products : The era of inflexible insurance policies driven by the sellers has come to an end. Thanks to the emergence of insuretech ?start ups, it is now possible to create and sell customized insurance policies tailored to individual needs in small, easily adaptable increments. These policies can be seamlessly integrated into specific requirements when purchasing an asset. For instance, a non-banking financial company (NBFC) can arrange insurance coverage for cattle when providing a loan for their purchase. Similarly, a small personal accident policy can be bundled with the purchase of fertilizers and other products. This trend is rapidly gaining momentum, and it won't be long before these compact insurance offerings, supported by connectivity and collaboration, dominate the insurance industry, extending insurance coverage to rural areas.

Riding on the 3C model , IRDAI is pushing for BIMA TRINITY of Bima Sugam , Bima Vistar & Bima Vaahak. This proposed trinity , if implemented well would rural market well.

Bima Sugam:

It would be an unified platform that would bring insurers , distributors and customers together. It would make policy purchases, service requests, and claims settlement process simple for customers at one convenient portal. Riding on technology , it would bring transparency & insurance companies would be fearful of customer’s complaints etc. It is likely to be an ONDC moment for insurance sector.

Bima Vistar:

It is an step in simplification & collaborative products. Under Bima Vistar , IRDAI expects a life & general insurance companies to collaborate & offer comprehensive bundled policy that covers life, health, property, and accidents. It is expected to be a defined benefits for each risk category, ensuring quick claim pay outs without the requirement of usual claim assessment process like the use of surveyors etc.

IRDAI has even proposed bringing composite licence norm for insurance companies. If this happens , the Bima Vistar proposal would get a boost in its offering as a single company would be in a position to offer comprehensive plan.

Bima Vaahaks:

It is proposed to be a women-centric workforce operating at the Gram Sabha level. These trained women advisors would educate and convince women about the benefits of comprehensive insurance, particularly Bima Vistar. By addressing concerns and emphasizing advantages, Bima Vaahaks are expected to empower women and enhance their financial security.

Model Insured Village

Rural India “ Bharat “ had not been on the business radar of the insurance companies in past because pf cost & viability reason. But things are changing for good. The technology has made it possible to transact business at much lower base & insurance companies are in a position to visualise a a great untapped market in lower tier cities & rural base.

?