Distribution a key challenge

tte major challenge faced not onlyby Weather Insurance product, but by all rural financial products are that sheer spread and diversity of target customers makes

Fig23.1. ^e challenge of distribution of weather insurance products
Table23.5. Overview oflCICI Weather Insurance during 2005-06

Crop

Risk Details

States

Number of farmers covered

Area covered (in acres)

Sum Insured (Rs mn)

Soybean

Deficit rainfall

RJ, MP

4,112

16,418

66

- Prolonged dry spell

RJ

453

1,223

6

Generic product for all field crops

- Deficit & Excess rainfall

AP, MP, MH, Iharkhand, KK, Orissa, RJ and TN

19,100

22,000

66

Grapes

- Deficit & Excess rainfall, Temp

MH, AP

365

395

20

- Excessive rainfall

Punjab

1,625

7,643

30

Cumin

- High relative humidity

RJ

686

688

6

Coriander

- Frost like temperature

- Unseasonal rainfall

RJ

2,075

2,200

6

Fenugreek

- Excessively high temperature during days with high RH

RJ

70

260

2

Kinnu

- Excessively high temperature

- Deficit rainfall

RJ

62

80

4

- Unseasonal rainfall

Punjab, Haryana

874

875

4

Cotton

- Deficit rainfall

MH

100,018

100,084

160

Total

150,000

225,000

cost effective distribution a big challenge. In India, 37% of the urban population lives in 23 cities whereas 37% of the rural population lives in 100,000 villages.

To overcome this challenge, a three pronged strategy is important to implement wherein ICICI Lombard takes help of all contact points to reach farmers and sell the product concept (Fig. 23.1). ICICI Lombard takes help of various aggregators to sell the policies and is in touch with various State Governments and the Central Government to endorse the product and also has its own dedicated distribution channel to market the product. It has been realized that locally available channels are not only cost effective but also trustworthy for the end customer.

Technology based solutions like smart cards offer a cost effective distribution and also quicker service delivery.

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