Insuring the Poor: Bajaj Allianz Microinsurance Initiatives in India

This case deals with a joint venture in microinsurance in India between a leading global insurer, Allianz SE, and an Indian conglomerate, the Bajaj Group - part of a broader commercial centure in the Indian life and nonlife insurance sector. The Bajaj-Allianz joint venture is, in turn, engaged in joint ventures in the microinsurance sector with NGOs (notably CARE) and a leading microfinance institution, SKS, both designed to recuce the cost of microinsurance distribution and expand the size of the insurance pool. The case discusses the microinsurance industry and its role in improving the lives of the poor, problems of microinsurance underwriting and distribution, and the role of microinsurance in the strategies of the various parties involved.

The purpose of the case is to introduce students to microinsurance as a tool for economic development and poverty alleviation. Microfinance is by now quite well understood; microinsurance is not. Hence the challenge is how microinsurance can be effectively constructed and distributed given the small policies involved, high distribution and claims settlement costs, and the need for joint ventures in dealing with both of these issues. A key question is whether microinsurance can represent a potentially viable business line (doing well by going good), for example, by migrating microinsurance clients into viable commercial insurance clients. A second key issue is the impact of microinsurance ventures (such as those described in the case) on Allianz SE's corporate social responsibility profile.