Case Study

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

A case study on the development of the insurance business in India and linkages to microfinance
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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.

About this Publication

By Pathak, N.
Published