The sheer scale of the Indian low-income market creates enormous scope and need for microinsurance. Potential voluntary demand is strong, particularly for micro health cover. A strong political imperative exists for financial inclusion, resonating in regulation that mandates low-income market expansion, as well as a dedicated microinsurance space. Yet the actual extent of microinsurance penetration in India remains very small. The legacy of a state-owned insurance monopoly still looms large. Private insurers as well as the insurance regulatory authority are very new and have found it difficult to prioritise microinsurance in the face of other pressing concerns. The regulatory strategy to compel insurers to reach down-market has triggered some interest in the low-income market, but rarely beyond that required by law. Furthermore, general insurance regulation as well the specific provisions for microinsurance impose restrictions that contribute to the fact that microinsurance has achieved limited success thus far.
A2I, Gates Foundation, IDRC, Cenfri