By Prashanta Bahera, United India Insurance Co. Ltd., Bhubaneswar, India. (Southasiadisasters.net issue No. 99, October 2013)
The World Bank has praised India’s evacuation of nearly 10 lakh people in Odisha and Andhra Pradesh, which ensured the minimal loss of human lives before the cyclone Phailin made landfall and attributed it to its years of disaster management preparedness.[1] The lessons learnt from the 1999 super cyclone were very helpful to the community and Odisha government. However, the impact of the cyclone is severe when we see the affected shelters, livelihoods, and agriculture fields. The economic loss is huge in the coastal districts of Odisha, especially in poor localities.
From Cyclone Phailin, we must learn to reduce the economic impact on community, especially on poor communities. One realistic option is – microinsurance that covers life and non-life both. The pilot is implemented through joint efforts. Concern Worldwide India facilitated the process in Odisha; AIDMI provided technical support; SWAD, a Puri Puri-based organisation implemented the policy and covered 950 poor and vulnerable families living in the Puri district of Odisha.[2]
The development opportunities are extremely restricted by different conditions like political, and economic, living in disaster-prone areas like coastal areas prone to cyclones, and floods as was seen in Cyclone Phailin. Through different microfinance and insurance policies, the poor could attain a better standard of life through programmes prepared in the field of financial business services. Demand of microinsurance is very huge and constantly increasing. There are several factors contributing to this reality including the frequency of disaster events due to high vulnerability, increasing population and awareness of insurance.
The poor and vulnerable families really required microinsurance that cover non-life components, especially shelter and livelihood. A single party cannot do this effectively. A combination of insurance companies and non-government organisations with a focus on effective facilitation and time-to-time follow-up with poor communities can produce the desired result. The above-mentioned case is one such initiative.
For microinsurance to be successful — for the insured and for the risk-bearers — many elements are important; such as simple and affordable insurance products reaching large numbers of people; stream-lined administration, including premium payment; simplified claims procedures and verifications; and rapid delivery of benefits. If most of these elements are present, it can be possible for microinsurance schemes to become sustainable, to perform well and to provide “real value” to the poor.
[1] The Hindu (October 2013) http://www.thehindu.com/news/national/other-states/world-bank-praises-indias-phailin-evacuation-efforts/article5247063.ece?homepage=true; Access on October 18, 2013.
[2] Process Documentation: Microinsurance for Disaster Risk Reduction (2012) AIDMI with Concern Worldwide India. https://www.concern.net/sites/www.concern.net/files/media/resource/process_documentation.pdf.
Disclaimer: The views expressed in this piece are those of the author/s and do not necessarily reflect the views or policies of AIDMI.