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Nithya Subramanian
Ratna Bhushan

NEW DELHI, Feb. 6

MOBILE phones, computers, cars, and now insurance. Rural India seems to have an appetite for it all.

Going by the findings of a recent study conducted by market research agency, MART, the rural consumer is now exhibiting an increasing propensity for insurance products.

And the biggest surprise is this — rural consumers are willing to dole out anything between Rs 3,500 and Rs 2,900 as premium each year, though the maximum takers are for products with sum assured of anything between Rs 25,001-Rs 50,000. Besides, 23 per cent of the respondents are willing to buy insurance worth Rs 75,001-Rs 1,00,000.

According to the study, while the awareness levels for life insurance is the highest, consumers in rural India are also aware of motor, accident and cattle insurance. "Insurance awareness in the life sector is extremely high, thanks to the Government-owned Life Insurance Corporation," said Mr Pradeep Kashyap, Managing Director, MART.

Over one-third of the respondents profiled by MART said that they had purchased some type of insurance, with maximum penetration skewed in favour of life insurance.

The perceived benefits of buying a life policy range from security of income, bulk return in future, daughter's marriage, children's education and good return on savings, in that order, the study adds. Besides, tax benefits do not figure as a key reason for buying insurance.

Meanwhile, the study points out that private companies have a huge task of creating awareness and credibility among the rural populace. "The perception that the money will not be safe in the hands of private insurance companies remains. And a very small percentage is likely to consider opting for products from private insurance companies,'' Mr Kashyap added. According to the study, private companies could utilise different delivery systems to market their products. These could be banks, regional rural banks, post offices, co-operative societies and kisan credit cards, among others.

The Insurance Regulatory and Development Authority (IRDA) has set stiff rural targets for insurance companies. For the life sector, in the first year, 5 per cent of the total policies written should come from the rural sector. This will go up to 15 per cent in five years. Similarly, for the non-life sector, two per cent of the total gross premium income should come from the rural sector going up to 5 per cent in five years, according to the regulation.

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