Over 200,000 people are thought to have died as a tsunami struck the Indian Ocean region in late December 2004, millions became homeless. A partnership between CARE International and Allianz provides micro-insurance to over 75,000 people in southern India.
 | Fishermen collect small fish from fishing nets. A partnership between Allianz and CARE International provides microfinance products to thousands of poor fishermen in southern India (Photo: Reuters) |
Since the disaster, relief organizations and NGOs have been trying to provide long-term assistance to affected communities in South and Southeast Asia. One element of this is to find ways "to help people get their lives back on track," says Geoffrey Dennis of CARE International, an NGO that has been operating relief and reconstruction projects in southern India.
"In the wake of a devastating disaster like the tsunami, a major part of helping rebuild people's lives in the long-term is to help them feel more secure," says Dennis.
As part of this wider aim, CARE has joined forces with Allianz's Indian subsidiary Bajaj Allianz, launching a three-year partnership that will provide micro-insurance to over 75,000 people in one of the areas worst hit by the tsunami - the southern Indian state of Tamil Nadu.
The project delivers affordable insurance products catered specifically to farm workers and fishermen in the coastal communities of Tamil Nadu. For most people in this region, this is their first access to insurance of any kind. Many people, particularly in the rural reaches of Tamil Nadu, cannot afford insurance; many others simply are not aware of it.
"It is poor people like those affected by the tsunami who are most in need of a social security net - yet all too often there are no options that are affordable or available to them," says Werner Zedelius, Allianz AG board member.
Savings and loans for the marginalized
Micro-insurance is a form of microfinance designed to suit the needs of people who would not normally have access to conventional finance and insurance tools. Most micro-insurance policies in India range between 5,000 and 50,000 rupees (85 to 850 euros), and come in the form of life, accident, household, fire, cattle and motor insurance.
 | CARE and Allianz (click the image to read more)CARE International and Allianz provide micro-insurance in India |
Both Allianz and CARE already have substantial experience with microfinance in India that they will bring into their new partnership. Since 1999, CARE's Credit and Savings for Household Enterprises (CASHE) program, has provided some 250,000 people - mostly women living in poor, rural communities - with access to savings and loans through local NGOs.
Meanwhile Allianz - working together with the German Agency for Technical Cooperation (GTZ), the United Nations Development Program (UNDP), and local NGOs in India - has sold life insurance to around 80,000 people.
The CARE-Allianz partnership also relies on community groups and self-help groups to administer microinsurance products, such as life and non-life insurance project covering assets, disability and accidents.
Allianz currently sells micro-life insurance policies for 87 cents per year, which provides families with 370 Euros of coverage in the event of a natural or accidental death. Allianz and its partners have found this product remarkably well-suited to the needs of the local market - in this case, poor communities.
"Precisely because they have so many other things to worry about, they need a social security net," recalls Heinz Dollberg, head of Asia-Pacific Division of Allianz about his experience with poor communities and micro-insurance in India.
"The risks faced by the poor are much the same as those for most individuals, but research has shown that they experience those risks with greater frequency and with a relatively greater financial impact," he adds.
Viable Assistance
That vulnerability could hardly have been more clearly demonstrated than on December 26, 2004 - the day a tsunami hit the coasts of India, killing over 6,500 people in Tamil Nadu and leaving over 100,000 homeless.
The waves that pounded the state's coasts and villages also destroyed homes, infrastructure, and fleets of fishing boats, thereby threatening the survival and livelihoods of thousands of local residents. Unemployment and infectious disease, for example, lingered as unwelcome effects in the region in the weeks and months following the tsunami.
CARE has rebuild around 1,600 homes in the region, along with water and sanitation facilities. The CARE-Allianz microinsurance supplements these measures by providing a degree of financial security for many locals in Tamil Nadu.
"We see this partnership as both an opportunity for Allianz to give something back to one of the communities hardest hit by the tsunami in December 2004, and to show how microinsurance can also be a viable business," says Werner Zedelius of Allianz. "Our ambition is to see this model replicated elsewhere, offering more services to poor and vulnerable communities."
editor: Valdis Wish
publishing date: August 2, 2006
last edited: May 08, 2008
Do you have something interesting to add? Write a comment and discuss this topic with other readers. Comments should be on-topic, non-commercial, and not contain abuse of any kind.
Comment Policy
