Tapping the Fortune at the Bottom of the Pyramid: A Case Study of Aviva Life Insurance and Linkages with Microfinance Institutions

This study analyzes the linkage between large private companies and microfinance institutions (MFIs) to provide financial services to rural populations in India. The study examines:

• Constraints to insurance service provision in rural areas;
• Preconditions necessary for linkages;
• Key design factors and processes of linkages;
• The impacts of financial linkage at the policy and institutional levels.

It states that:

• Insurance companies in India are looking at rural markets as potential areas of growth;
• They have tried to develop market channels and linkages in rural areas;
• Other than the ‘"Life Insurance Corporation of India" (LIC), the three insurance companies that are attempting to reach out to rural clients are:
  • ICICI Prudential Insurance Company Ltd.;
  • TATA-AIG Insurance Company Ltd,;
  • AVIVA Life Insurance Company India Private Limited (AVIVA).

The study explores:

• The development of life insurance in India, discussing the role of the Government and the development of the regulatory framework for insurance provision;
• Insurance sector reforms and the role of the ‘Insurance Regulatory and Development Authority (IRDA);
• AVIVAs partnerships with:
  • Bharatiya Samruddhi Financila Services Limited (BASIX);
  • Self-Employed Women's Association (SEWA);
  • Village Welfare Association (VWS);

It concludes that:

• Insurance companies in rural areas still face problems in establishing linkages;
• There is a need to invest more in research and development related to new, more appropriate products for rural clients.