TATA-AIG Life Insurance Company Ltd. India (CGAP Working Group on Microinsurance Good and Bad Practices Case Study No. 14)

Publication Date: Sep 2005
Published by: CGAP Working Group on Microinsurance
Document Type: Case Study (PDF)

View this Document (665 KB)   Email this Document

Micro-agent model: Tata-AIG's new distribution methodology of microinsurance in India

This paper provides a broad overview of how the microinsurance program at TATA-AIG emerged and how it operates.

It states that according to TATA-AIG, microinsurance has the following benefits:

• Fulfillment of corporate social responsibility;
• Use of the microinsurance to get the brand into a new market;
• A means of developing a good relationship with the Indian insurance regulator.

It further states that TATA-AIG realized that relying solely on MFIs to sell its products would not be sufficient in the Indian context. This led them to:

• Explore other distribution channels,
• Rely on MFIs and NGOs for information about the local community, to help build trust with the local community,
• Outsource some operations to the MFI/NGOs to lower servicing and selling costs.

The paper then discusses the partnerships, distribution channels, premium calculation, premium collection, claims management, risk management and controls for the products offered by the scheme.

It concludes that the development of micro-agents and their firms is the most significant innovation of TATA-AIG’s microinsurance work. If successful, the model will provide a major means of overcoming the microinsurance distribution problem.