Hyderabad, March 13
Royal Sundaram General Insurance Company and BASIX, a microfinance institution, have announced two more insurance covers for the members of the self-help groups (SHGs) in the rural sector across the country.
Speaking to newspersons on the eve of completing five years of partnership with BASIX, the Royal Sundaram Managing Director, Mr Antony Jacob, said that `Micro Enterprise Shield' would take care of rural enterprises while `Gramin Arogya Raksha' would offer health insurance benefits to the SHG members.
He described the partnership with BASIX as a strategic move towards increasing the penetration of general insurance in the rural sector.
"Royal Sundaram has realised there is a need to introduce tailor-made products to address the specific needs of the rural markets. Microfinance institutions such as BASIX have a strong network and distribution capability and hence are successful as distribution partners in rural areas for our products."
According to him, close to seven per cent of the insurance company's gross premium - approximately Rs 27 crore - comes from the rural sector.
Stating that BASIX contributes more than Rs 1 crore of gross premium, Mr Jacob said that the insurance company expects growth of 100 per cent in gross premium from BASIX in the next fiscal.
Mr Jacob also said that the company expected gross premium levels to increase to around Rs 450 crore during the current fiscal from around Rs 330 crore last fiscal, posting a growth of 35 per cent.
The current paid-up capital of Rs 120 crore would be comfortable for handling gross premium of up to Rs 600 crore and the company did not find any need to infuse fresh capital in the near future, he added.
According to the BASIX Managing Director, Mr N.V. Ramana, the microfinance institution recognised that the vulnerability of the poorer households to various risks is higher.
"BASIX has had a successful partnership with Royal Sundaram in providing health and livestock insurance to its customers. A significant aspect of these products has been their simplicity in features and processes that are desirable for the rural market. by extending these benefits to SHG women and introducing the micro-enterprise cover for rural non-farm enterprises," he added.