Community Managed Micro Insurance

Andhra Pradesh


Micro-insurance is the provision of insurance to low-income households. Poor households are especially vulnerable to risk, both in the form of natural calamities as well as more regular occurrences of illness and accidents. Self Help Groups and their federations play an active role in reducing or protecting against this vulnerability through providing savings services to build up resources that can be drawn down in cases of credit for increasing income earning opportunities and through providing of emergencies. However, such events still translate into crisis for many poor households and erode the economic gains they have made as members of Self Help Groups. Credit and savings services are inadequate when households are exposed to risks which cause losses that are beyond their means. Miro-Insurance can serve as a promising response to such members’ needs.  

The principal objective of SERP is to promote Self Managed Institutions of the Poor through Self Help Group across the State of Andhra Pradesh. The key functions of the CBOs promoted by SERP are financial intermediation, social intermediation and community development through sustainable livelihoods promotion. SERP strongly believes in the assumption that the poor have the potential to come out of poverty, provided that timely facilitation is ensured by the Government. In order to harness the potential of the poor are organized to form Self Help Groups at district level through DRDA. The process of institution building has it that at village level all the poor women are formed into SHGs, all the SHGs are incorporated under Andhra Pradesh Mutually Aided Cooperative Societies Act 1995 as “Village Organizations (VO), all the Village Organizations are federated under the same Act as Mandal Samakhyas (MS) at Mandal (Block) level and all the Mandal Samakhya are further confederated at District level as Zilla Samakhyas (ZS). Village Organizations are the front-line self-managed Community Based Organizations for economic and social betterment of the community. All the development activities of SERP are carried out in and around the CBOs. The activities and programs are shouldered by the Zilla Samakhyas with the active participation of all the stakeholders.

In this back drop, the Department of Rural Development through SERP has promoted 9.47 lakhs SHGs with a membership of 106 lakh poorest of the poor women. This constitutes more than 28% of all the SHGs in entire India.

This Operational Manuel provides useful information and technical aspects for the SHG members, their federations for implementing various low cost micro insurance products initiated by the Government of India as well as Andhra Pradesh. It illustrates the process right from awareness & enrollment to Claim settlement, establishing Call Centers, development of social capital, positioning of Bima Mithras, best practices for providing quick and quality services to their own community members at their thresh holds.

The rural poor women particularly the young SHG women face enormous problems if they loose their husbands due to untimely death. The lose of head or bread-winner, leaves the family in a shudder to fight for survival. The family comes under severe stress and shock, both psychological and economic. The households end up in a disastrous situation. The family is flung into irrecoverable abject poverty. The severity of the problem can be gauged from the fact that in Andhra Pradesh alone more than 250 persons face untimely death every day. Those are men and women in different age groups. SERP, a society committed for cause of rural poor, initiated the insurance interventions across the state. The Government of Andhra Pradesh, keeping in view of the prior experience of the SHGs in this aspect and by taking the advantage of the announcement of the prestigious Scheme of Aam Aadmi Bima Yojana for the landless laborers, named the Micro-insurance interventions in the state as “Indira Jeevitha Bima Pathakam” in the year 2008. It was launched by Smt. Sonia Gandhi, the Hon’ble Chairperson of UPA Government by handing over a Cheque of Rs.38.00 Crorers towards state contribution of premium.