Exploring the Challenges of Micro-Insurance Implementation in Unorganized Sector: A Case Study

Abstract

Purpose: A focus on policies that benefit the underserved is necessary to ensure equitable and sustained economic growth in India, where around 70% of the population lives in rural regions, many of whom experience poverty. As a result of the increased risk exposure of the economically disadvantaged, micro-insurance has become a crucial step in this direction. India's insurance market has a low penetration rate, but the situation is significantly worse among those with lower incomes in the population. Insurance companies have had trouble grabbing the interest of their target market despite the possibility that insurance could provide risk protection to this group. The successful implementation of micro-insurance, however, faces a variety of challenges on both the supply and demand sides. This paper aims to study the crucial role that microinsurance plays in fostering equitable and long-term economic growth in India as well as the challenges associated with implementing microinsurance in the unorganized sector. Design/Methodology/Approach: The research methodology employed in this study is primarily based on the utilization of secondary data collected by IRDA reports, case studies, insurance company websites, and pertinent books, articles in the insurance field, and other government websites being used. Findings: The study reveals that introducing micro-insurance into the unorganized sector faces substantial challenges, necessitating a comprehensive approach that includes education, awareness development, transparency measures, and insurance product modification. Overcoming these obstacles is critical to providing financial security and stability to the unorganized sector. Originality/value: This study may be useful to various stakeholders like insurance companies/sectors, government, micro insurance agents, unorganized sector, other micro-insurance users, and society. Paper type: Case study.