By Timothy Eberly on Unsplash
Through B2C model, companies can offer microinsurance products such as life, non-life, and crop insurance as risk protection mechanism for low income individuals, and generate revenue from insurance premium.
To increase penetration among the targeted low income individuals, microinsurance products have special characteristics such as low insurance premium, lower insurance payout coverage, shorter period, as well as convenience and easy to understand.
This IOA will help low income individuals and farmers reduce financial risks and enable them to not fall into poverty or debt from economic shock, help communities reduce risk of violence from informal loans, and help the society strengthen resilience and quicker economic recovery.
Investors can invest money to help establish reserves, capital, and financial technology for companies that offer microinsurance products. Some companies active in this space are:
Bank of Agriculture and Agricultural Cooperatives and Office of Insurance Commission partnered to offer crop insurance for rice. The crop insurance covers crop damage from natural disaster and pest with highest payout of USD 231.46 per hectare (THB 1,111 per rai). Crop insurance for other types of crop are also provided but with different conditions.
AIA insurance company has provided Microinsurance 200, which covers for death, disability and dismemberment from accidents during travel by motorcycle, and also covers for funeral expense. The microinsurnace premium is USD 6.67 (THB 200) per year with highest payout of USD 3,333.3 (THB 100,000).
Microinsurance helps low income individuals mitigate financial risks and loss of income.
