Microinsurance providers in India have recently implemented strategies such as street plays and handwritten postcards in local languages to increase policy renewals. These strategies reportedly have helped decrease renewal costs by approximately 35 percent, offsetting challenges such as low levels of literacy and product awareness, language barriers and lack of infrastructure. Insurers have also been promoting renewals through rural bank branches and NGOs as these locations are visited by customers on a regular basis.
Yogesh Gupta, the head of business procurement and microinsurance at Bajaj Allianz Life Insurance, an Indian company jointly owned by Bajaj FinServ of India and Allianz of Germany, reportedly said, “We faced a lot of challenges in the initial phase, but our experience in this sector helped us to design innovative and cheaper tools like use of postcards, tele-calling, panchayat [village government] meets…. These activities are conducted in villages across the country, reinforcing messages around the essence and importance of renewals.”
By Nicole Boyd, Research Associate
Sources and Additional Resources:
Business Standard. “Insurers use cost-effective ways to boost renewal premiums,” http://www.business-standard.com/article/finance/insurers-use-cost-effective-ways-to-boost-renewal-premiums-113040500425_1.html
MicroCapital. April 22, 2013, “MICROCAPITAL BRIEF: Insurance Regulatory and Development Authority (IRDA) of India Expands Allowable Microinsurance Agent Entity Types,” https://www.microcapital.org/microcapital-brief-insurance-regulatory-and-development-authority-irda-of-india-expands-allowable-microinsurance-agent-entity-types/
MicroCapital. March 1, 2013, “MICROCAPITAL BRIEF: SKS Microfinance Fined $92k for Collecting Improper Fees as Agent of Bajaj Allianz Life Insurance,” https://www.microcapital.org/microcapital-brief-sks-microfinance-fined-92k-for-collecting-improper-fees-as-agent-of-bajaj-allianz-life-insurance/
MicroCapital. March 5, 2013, “MICROCAPITAL BRIEF: India Close to Finalizing Rural Insurance, Microinsurance Regulations,” https://www.microcapital.org/microcapital-brief-india-close-to-finalizing-rural-insurance-microinsurance-regulations/
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