Aviva Life Insurance is aggressively looking at microfinance insurance and aims to garner 10% of new business premium from this segment in calendar 2009.
The company plans to tie up with microfinance institutions (MFIs) in the country and will launch products this year with an emphasis on spouse covers, which will comprise one-third of its microinsurance portfolio.
Monica Agrawal, director, corporate initiatives, said the company has set a target of 2 million policies in calendar 2008.
Distribution and premium collection are the main operational hurdles, she said.
The company already has tie-ups with MFIs like BASIX and Arohan in 12 states, and plans are afoot to enter other states.
According to a UNDP study, microinsurance represents an untapped market of $2 billion in India. Microinsurance demand in India has remained low largely because of a severe mismatch between services offered by insurers and the needs of the insured.
At present, microinsurance covers around 5 million people, a mere 2% of the country’s poor.