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UNDP releases report on insurance


New Delhi : The United Nations Development Programme (UNDP) Wednesday released a report which highlights the fact that nearly 90 percent of India's population is excluded from the insurance market.

The report titled "Building Security for the Poor: Potential and Prospects for Microinsurance in India" is based on field investigations and public consultations in rural areas of Rajasthan, Orissa and Tamil Nadu.

The study revealed that the demand for microinsurance in India is very low basically because of the fact that there is a severe mismatch between the services offered by the insurance companies and the needs of the people.

According to the study, the rural poor not only want insurance to be affordable, but also to protect them against frequent risks which they face such as serious ill health, accidents, harvest failure and fire.

But insurance companies mostly offer standardised products for a clientele that is relatively better off, urban and male, with few offers for women.

As a result, only five million of India's 950 million population – comprising just two percent – is insured.

The study recommends that insurance companies should broaden the scope of products with an eagerness to customise in accordance to one's needs as well as increase distribution channels and deliver benefits without delay.