Monday, July 7, 2008

Insurance companies can earn from rural folks

by Jo Black

The Associated Chambers of Commerce and Industry of India (ASSOCHAM), the country’s highest body of the chambers of commerce, reveals that rural areas of the country have a lot of potential for the insurance sector.

In a paper on `Rural India and Its New Investors’, the Assocham has said that Indian insurance companies can add about Rs. 10 billion ($250 million) to their net worth from nearly 200 million rural folk, provided these come out with innovative schemes at an affordable premium price.

Suggesting insurance companies, the business body says that insurers can lure rural investors, even for agri, housing, personal, education and auto loans.

Till date, rural folk prefer post offices and commercial banks for their saving purpose, but they are looking for other safer savings channels for higher returns on their investments and insurance companies could provide a better option for them

According to ASSOCHAM, over 700 million rural people live in India’s villages out of which approx. 200 million of the rural populace have reasonable per capita income due to their double income from agriculture and non-agriculture sources.

Currently, only 8-10% rural households are covered under life insurance schemes and the remaining 90% can be targeted for new innovative insurance schemes.

 

 

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