New Delhi, May 13: Insurance companies are finding it hard to hawk their risk covers in villages, with their march into the hinterland tramelled by the price sensitiveness and the tendency of the rural folk to link premia payments to the harvest.
“The rural population is very price sensitive and almost 56 per cent of rural India opts for premium payment during harvest time which is half-yearly deposits,” says the Forte report on rural insurance jointly produced by ING Vysya Life Insurance and the Federation of Indian Chamber of Commerce and Industry (Ficci).
“Low value policies are preferred with almost 75 per cent respondents being assured for less than Rs 50,000,” says the study.
The encouraging sign is that although only 27 per cent of rural population has sought an insurance cover at present, 51 per cent of the people intend to buy insurance products in near future.
Respondents of the survey indicate that life insurance is the most preferred type of insurance combined with additional features like loan facility, life plus accident insurance or life plus health plus accident insurance.
Amongst life policyholders, money back policy (60 per cent) and endowment policies (34 per cent) are popular while the penetration of whole life products is very low.
The bad news for private insurers — who are already struggling to establish a beachhead in the rural areas — is that rural folk feel ‘very risky’ about reliability of private insurers. Less than 5 per cent of the respondents could correctly recall the name of any private insurance company.
Life Insurance Corporation (LIC) has the complete monopoly in this market. According to the study, 95 per cent of the respondents, including non-policy holders rated LIC as ‘very safe’.
The report suggest that e-choupals could be developed as a new market place for selling insurance products. Over 70 per cent of self-help groups, cooperative societies and youth clubs expressed their willingness to purchase group insurance through this route.
The e-choupal is basically a village-level internet based forum devised by ITC’s international business division.