District Rural Development Agency, Andhra Pradesh, India Access to Insurance for the Poor by the Poor of the Poor

District Rural Development Agency, Andhra Pradesh, India Structure What is Indira Kranthi Patham Core Beliefs Institutional model Activities Community Managed Life Insurance

What is Indira Kranthi Patham The fundamental building blocks of the strategy are Facilitate Empowerment Improve Opportunities It is a Community Driven Development project Indira Kranthi Patham Increase Security District Rural Development Agency, Andhra Pradesh, India Indira Kranthi Patham is rural poverty alleviation project under implementation in the State of Andhra Pradesh (India) since October, 2000

Our Core beliefs Indira Kranthi Patham Each poor family has the inherent potential and strong desire to come out of poverty The poor require participatory institutions of their own to unleash this potential There are committed people among the poor – Social Capital – who are willing to sacrifice their effort and time to help the other poor There is a need for a sensitive support mechanism for nurturing the institutions of the poor and facilitate social mobilization District Rural Development Agency, Andhra Pradesh, India

Social networks of the rural poor women V.O SHG s MMS Thrift and credit activities Monitoring group performance Group level poverty reduction plans Household inv plans E.C - 2 from each S.H.G, 5 Office bearers Strengthening of SHGs Arrange line of credit to the SHGs Social action Village development Marketing and food security Support activists E.C - 2 from each V.O, 5 Office bearers Support to VOs Secure linkage with Govt. Depts, fin institutions, markets Auditing of the groups Micro Finance functions ZS 910 MS VOs 6.9 million families SHGs

Activities Indira Kranthi Patham Access Commercial loans from Banks $266 million in $445 million in $778 million in District Rural Development Agency, Andhra Pradesh, India Community Managed food security Marketing support to Members Social Action Health and Disability interventions Community Managed insurance

Designing Abhaya Indira Kranthi Patham Outsource risk while retaining control over policy administration District Rural Development Agency, Andhra Pradesh, India Minimize time gap between premium collection and start date of coverage Do away with cumbersome claim documentation Provide services at the doorsteps of the insured family Establish Zilla Samakhya’s credibility with the Insurer and the insured Premium must be affordable and attractive Group Insurance was the best option Voluntary enrollment

Natural Death…Rs.30,000 (USD ) Accidental Death …Rs.75,000 (USD ) Total & permanent disability due to accident …Rs.75,000 (USD ) Loss of One Eye/Leg/Hand due to accident…Rs.37,500 (USD ) Abhaya Sum Insured 65 (USD 1.4) per head collected 50 (USD 1.1) per head paid to LIC District Rural Development Agency, Andhra Pradesh, India

Comparative advantages Indira Kranthi Patham District Rural Development Agency, Andhra Pradesh, India InsurerCBOs Provide risk cover Training of CBOs Claim Settlement Enrollment MIS Claim documentation Part settlement within 48 hours

Insurance and Social networks of the poor Member education Enrollment Collection of premium Reporting claims Facilitate documentation of claims Planning and Monitoring Training of VOs Claim docuementation Office bearer is member of Area Committee Tie up with an Insurance Company Nodal Agency for the scheme Maintain data base and Call Centre Issue Certificate of Insurance MIS Capacity building of its staff and community Pay out solatium within hours SHG s MMS ZS VO st year Lives insured

Insurance and Social networks of the poor Member education Enrollment Collection of premium Reporting claims Facilitate documentation of claims Planning and Monitoring Training of VOs Claim docuementation Office bearer is member of Area Committee Tie up with an Insurance Company Nodal Agency for the scheme Maintain data base and Call Centre Issue Certificate of Insurance MIS Capacity building of its staff and community Pay out solatium within hours 78% Renewal rate nd year nd year Lives insured SHG s MMS ZS VO

Claim village Call Centre located in ZS Area Committee consisting of Community Members ATM Phone Area Committee completes claim documentation and sends to LIC via Abhaya Call Center Visit Claim Settlement Process Abhaya District Rural Development Agency, Andhra Pradesh, India Payment of Solatium to the nominee Rs.5000/-

Death Claims received Claims accepted Claims rejected - 29 Natural Death Accidental Death - 26 Disability Claims - 39 Solatium paid (Rs.5000/-) Claims sent to LIC Claims settled by LIC Claims settled by ZS Total lives : Claims as on District Rural Development Agency, Andhra Pradesh, India

Indira Kranthi Patham CBOs can reach out faster and in a more credible manner District Rural Development Agency, Andhra Pradesh, India Enrollment in both years completed in 20 days Low cost of administration Rs.6-8 per policy(USD 0.17) Use of IT makes claim administration efficient and effective CBOs retain control over the policy and hence improve the acceptance levels by the poor

Indira Kranthi Patham “When community-based organizations are responsible for project design, management, and monitoring, costs per beneficiary are dramatically less, results are better, and benefits are more sustained” District Rural Development Agency, Andhra Pradesh, India