The recent recommendations by the IRDAI committee to allow standalone or exclusive Micro Insurance Companies (SAMI) has caused quite a stir and excitement in the financial inclusion space. In this blog, we de-code what it means for the microinsurance sector in general and mutuals and cooperatives in particular.
What’s Great?
What’s Good?
For mutuals and not-for-profits in the space, it is still a very heavy ask, why should investors put their money in a low-margin, non-profit, member driven model? Impact investors however could take the lead here or mutuals could crowd-fund the same. Microinsurance mutuals in the Philippines, where the model has been extremely successful, have a capital requirement of less than a crore (INR 76 lakh).whereas Indian mutuals will require 20 Cr to begin with.
What merits further discussion?
While the IRDA SAMI committee has made suggestions as to how the IRDA can make these recommendations come true, until they are notified, they remain alas, recommendations.
What we all can do — The recommendation report is now on the IRDAI website and comments have been invited from all stakeholders. So do share your feedback and contribute to Insuring Bharat! You can view the report and invitation for comments here.