PREFACE

An effort has been made to understand in detail about THE RURAL MARKETING PRDUCTS AND STRATEGIES OF INSURANCE COMPANIES. The way in which an Insurance company markets its products and services in the rural areas is totally different than that of the cities due to differences in thinking, education and financial status. Therefore, they evolve a strategy to make the rural people understand the need of Insurance in their lives. Rural market has an untapped potential like rain but it is different from the urban market so it requires the different marketing strategies and marketer has to meet the challenges to be successful in rural market. Rural marketing will grow in importance in the coming years.

TABLE OF CONTENTS Chapter No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Contents Introduction to insurance & rural marketing Aditya Birla sun life insurance Tata aig life insurance solutions Chola MS general insurance Life Insurance Corporation of India Max Bupa health Insurance Agricultural Insurance Company Of India Max Life Insurance Recent News & Development Conclusion

INTRODUCTION TO INSURANCE AND RURAL MARKETING

Concept of Insurance In a layman's words, insurance means, a guard against pecuniary loss arising on the happening of an unforeseen event. In developing economies, the insurance sector still holds a lot of potential which can be tapped. Majority of the people in the developing countries remains unaware of the functions and benefits of insurance and it is for this reason that the insurance sector is still to grow. Tangible or intangible an individual can insure anything! Be it a house, car, factory, or the voice of a singer, leg of a footballer, and the hand of an author.....etc. It is possible to insure all these as they have the possibility of becoming non functional by any disaster or an accident. Basic functions of Insurance 1. Primary Functions 2. Secondary Functions. 3. Other Functions Primary functions of insurance Providing protection The elementary purpose of insurance is to allow security against future risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place, but can for sure allow for the losses arising with the risk. Insurance is in reality a protective cover against economic loss, by apportioning the risk. Collective risk bearing Insurance is an instrument to share the financial loss. It is a medium through which few losses are divided among larger number of people. All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. Evaluating risk Insurance fixes the likely volume of risk by assessing diverse factors that give rise to risk. Risk is the basis for ascertaining the premium rate as well. Provide Certainty Insurance is a device, which assists in changing uncertainty to certainty. Secondary functions of insurance Preventing losses Insurance warns individuals and businessmen to embrace appropriate device to prevent unfortunate aftermaths of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc.

Covering larger risks with small capital Insurance assuages the businessmen from security investments. This is done by paying small amount of premium against larger risks and dubiety. Helps in the development of larger industries Insurance provides an opportunity to develop to those larger industries which have more risks in their setting up. Other functions of insurance Savings and investment tool Insurance is the best savings and investment option, restricting unnecessary expenses by the insured. Also to take the benefit of income tax exemptions, people take up insurance as a good investment option. Medium of earning foreign exchange Being an international business, any country can earn foreign exchange by way of issue of marine insurance policies and a different other ways. Risk Free trade Insurance boosts exports insurance, making foreign trade risk free with the help of different types of policies under marine insurance cover. Insurance provides indemnity, or reimbursement, in the event of an unanticipated loss or disaster. There are different types of insurance policies under the sun cover almost anything that one might think of. There are loads of companies who are providing such customized insurance policies. Insurance provides indemnity, or reimbursement, in the event of an unanticipated loss or disaster. There are different types of insurance policies under the sun to cover almost anything that one might think of. There are loads of companies who are providing such customized insurance policies. Insurance companies in India IRDA has till now provided registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are considered then there are presently 13insurance companies in the life side and 13 companies functioning in general insurance business. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business. Emerging Rural Insurance Market in India India is fast emerging on the world map as a strong economy and a global power. The country is going through a phase of rapid development and growth. All the vital industries and sectors of the country are registering growth and thus, luring foreign investors. And insurance sector is one of them.

Market Analysis: With a huge population and large untapped market, insurance happens to be a big opportunity in India. However, insurance penetration in the country continues to be low. The level of penetration tends to rise as income increases, particularly in life insurance. India, with its huge middle class households, has exhibited potential for the insurance industry. This has made international players to look at the Indian market. Moreover, saturation of markets in many developed economies has made the Indian market all the more attractive for global insurance majors. Insurance in India Started in 1818(Oriental Life Insurance Company) Life insurance premium accounting to 2.5% of the countrys GDPFDI up to 26% In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were passed to regulate the insurance business. Stagnation in Agricultural Growth Deceleration in the growth rate of agricultural production Stagnation in yields of important crops; with larger intake of modern inputs Disappointing performance of commercial crops Large fluctuations in the output prices. Insurance Acts The insurance Act 1938 Life Insurance Corporation Act, 1956 General Insurance Business (Nationalisation) Act, 1972 Insurance Regulatory and Development Authority(IRDA) Act, 1999 The rural needs and wants Farmers, Craftsmen, Milkman, Weaver, Casual labourers, Construction workers Comprehensive risk will be provided to cover yield losses due to non preventable risks, viz.: A. Natural Fire and Lightning B. Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc C. Flood, Inundation and Landslides, Drought, Dry spells, diseases etc. Penetration of Insurance Products Over one-third of rural population have insurance, with life insurance having the maximum penetration.

Insurance information Delivery Systems E-Choupal This is an internet-based co-ordination point for purchase of agricultural produce and a forum for agricultural information and interaction, particularly for affluent farmers Post Office This institution is very highly trusted by the rural population with access to the smallest villages. Commercial/ Co-operative Grameen/ RRBs Banks are viewed as safe institutions to invest in and any tie up would enhance the credibility of insurers and their agents Agent Network As Insurance customers rely on personal interactions and a high level of service, some degree of rural agent network is a must.

Information network Delivery Systems Self Help Groups/ Youth Clubs/ Co-operative Societies These are various rural forums that meet regularly at the village, block and district levels and can be used for promoting group insurance. Once the group leadership approves the insurance company, members will be more inclined to accept its insurance products. Producers Co operative Societies Producers co-operative societies are rural forums for interaction/information and finance for farmers. Regular meetings are held and can be used as a group platform to sell policies (specifically accident/ crop/health policies) to members NGOs NGOs working in micro-finance with grass-root reach, trust and credibility can be used to access members of Self Help Groups who would then be more inclined to purchase from the private player.

Meaning and definition of rural marketing The term rural marketing used to be an umbrella term for the people who dealt with rural people in one way or other. This term got a separate meaning and importance after the economic revaluation in Indian after 1990. So, before venturing into the other aspects of rural marketing let us discuss the development of this area in different parts which is briefly explained here. Part I (Before 1960) Rural marketing referred to selling of rural products in rural and urban areas and agricultural inputs in rural markets. It was treated as synonymous to agricultural marketing. Agricultural produces like food grains and industrial inputs like cotton, oil seeds, sugarcane etc. occupied the central place of discussion during this period. The supply-chain activities of firms supplying agricultural inputs and of artisans in rural areas received secondary attention. The local marketing of products like bamboo baskets, ropes, window and door frames, and small agricultural tools like ploughs by sellers like black smiths, carpenters, cobblers, and pot makers were emphasised in general. This was totally an unorganized market where all banias and mahajans (local business people) dominated this market. Part II (1960 to 1990) In this era, green revolution resulted from scientific farming and transferred many of the poor villages into prosperous business centres. As a result, the demand for agricultural inputs went up especially in terms of wheat and paddies. Better irrigation facilities, soil testing, use of high yield variety seeds, fertilizers, pesticides and deployment of machinery like powder tillers, harvesters, threshers etc. changed the rural scenario. In this context, marketing of agricultural inputs took the importance. Two separate areas of activities had emerged- during this period marketing of agricultural inputs and the conventional Agricultural Marketing. During this period, the marketing of rural products received considerable attention in the general marketing frame work. The formation of agencies like Khadi and Village Industries Commission, Girijan Cooperative Societies APCO Fabrics, IFFCO, KRIBHCO, etc., and also the special attention government had paid to promote these products were responsible for this upsurge. Village industries flourished and products like handicrafts, handloom textiles, soaps, safety matches, crackers etc. hit the urban market on a large scale from rural areas. Part III (After Mid 1990s) The products which were not given attention so far during the two earlier phases were that of marketing of household consumables and durables to the rural markets due to obvious reasons. The economic conditions of the country were as such that the rural people were not in a position to buy these kinds of products. Secondly, our market was in a close shape and we newer allowed companies (foreign) to operate in Indian market. But we lifted the opened up economy, consequently companies started flourishing in India. The small villages/hamlets were widely scattered making reach difficult and expensive consequently. Rural markets were seen an adjunct to urban market and conveniently ignored. However, since 1990s, Indias industrial sector had gained in strength and maturity. Its contribution to GNP increased substantially. A new service sector had emerged signifying the metamorphosis of agricultural society into industrial society. Meanwhile, due to the development programmes
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of the central and state governments, service organizations and socially responsible business groups like Mafatlal, Tatas, Birlas, Goenkas and others, the rural area witnessed an all round socio-economic progress. The economic reforms further accelerated the process by introducing competition in the markets. Steadily, the rural market has grown for household consumables and durables. Rural marketing represented the emergent distinct activity of attracting and serving rural markets to fulfil the needs and wants of persons, households and occupations of rural people. As a result of the above analysis, we are in a position to define rural marketing Rural marketing can be seen as a function which manages all those activities involved in assessing, stimulating and converting the purchasing power into an effective demand for specific products and services, and moving them to the people in rural area to create satisfaction and a standard of living for them and thereby achieves the goals of the organization. Nature and characteristics of rural market There goes a saying that the proof of the pudding lies in the eating. So also the proof of all production lies in consumption/marketing. With the rapid pace of technological improvement and increase in peoples buying capacity, more and better goods and services now are in continuous demand. The liberalization and globalization of the Indian economy have given an added advantage to sophisticated production, proliferation and mass distribution of goods and services. Taking these into consideration, the question may arise whether marketers should concentrate their activities in urban India consisting of metros, district headquarters and large industrial townships only, or extend their activities to rural India. Rural India is the real India. The bulk of Indias population lives in villages. In terms of the number of people, the Indian rural market is almost twice as large as the entire market of the USA or that of the USSR. Agriculture is main source of income. The income is seasonal in nature. It is fluctuating also as it depends on crop production. Though large, the rural market is geographically scattered. It shows linguistic, religious and cultural diversities and economic disparities. The market is undeveloped, as the people who constitute it still lack adequate purchasing power. It is largely agricultural oriented, with poor standard of living, low-per capital income, and socio-cultural backwardness. It exhibits sharper and varied regional preferences with distinct predilections, habit patterns and behavioural characteristics. Rural marketing process is both a catalyst as well as an outcome of the general rural development process. Initiation and management of social and economic change in the rural sector is the core of the rural marketing process. It becomes in this process both benefactor and beneficiary. Significance of the rural markets If you meet a sales executive today and ask which market he would prefer to serve, the immediate answer would be, Rural Markets as they are still unexploited. A number of factors have been recognized as responsible for the rural market boom. Some of them are:
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1. Increase in population, and hence increase in demand. The rural population in 1971 was 43.80 crores, which increased to 50.20 crores in 1981, 60.21 crores in 1991 and 66.0 crores in 2001. 2. A marked increase in the rural income due to agrarian prosperity. 3. Large inflow of investment for rural development programmes from government and other sources. 4. Increased contact of rural people with their urban counterparts due to development of transport and a wide communication network. 5. Increase in literacy and educational level among rural folks, and the resultant inclination to lead sophisticated lives. 6. Inflow of foreign remittances and foreign made goods in rural areas. 7. Changes in the land tenure system causing a structural change in the ownership pattern and consequent changes in the buying behaviour. The general rise in the level of prosperity appears to have resulted in two dominant shifts in the rural consuming system. One is conspicuous consumption of consumer durables by almost all segments of rural consumers, and the obvious preference for branded goods as compared to non-branded goods of rural. Problems in rural marketing There are many problems to be tackled in rural marketing, despite rapid strides in the development of the rural sector. Some of the common problems are discussed below: Transportation Transportation is an important aspect in the process of movement of products from urban production centres to remote villages. The transportation infrastructure is extremely poor in rural India. Due to this reason, most of the villages are not accessible to the marketing man. In our country, there are six lakhs villages. Nearly 50 per cent of them are not connected by road at all. Many parts in rural India have only kachcha roads. During the monsoons, even these roads become unserviceable. Regarding rail transport, though India has the second largest railway system in the world, many parts of rural India however, remain outside the rail network. Communication Marketing communication in rural markets suffers from a variety of constraints. The literacy rate among the rural consumers is very low. Print media, therefore, have limited scope in the rural context. Apart from low levels of literacy, the tradition-bound nature of rural people, their cultural barriers and their overall economic backwardness add to the difficulties of the communication task. Post, telegraph, and telephones are the main components of the communication infrastructure. These facilities are extremely inadequate in the rural parts of our country. In rural areas, the literacy percentage is still low, compared to urban areas. In India, there are 18 recognized languages. All these languages and many dialects are spoken in
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rural areas. English and Hindi are not understood by many people. Due to these problems, rural consumers, unlike urban consumers do not have exposure to new products. Availability of appropriate media It has been estimated that all organized media in the country put together can reach only 30 per cent of the rural population of India. The print media covers only 18 per cent of the rural population. The radio network, in theory, covers 90 per cent. But, actual listenership is much less. TV is popular, and is an ideal medium for communicating with the rural masses. But, it is not available in all interior parts of the country. It is estimated that TV covers 20 per cent of the rural population. But, the actual viewership is meagre. The cinema, however, is a good medium for rural communication. But, these opportunities are very low in rural areas. Warehousing A storage function is necessary because production and consumption cycles rarely match. Many agricultural commodities are produced seasonally, whereas demand for them is continuous. The storage function overcomes discrepancies in desired quantities and timing. In warehousing too, there are special problems in the rural context. The central warehousing corporation and state warehousing, which constitute the top tier in public warehousing in our country, have not extended their network of warehouses to the rural parts. It is almost impossible to distribute effectively in the interior outlets in the absence of adequate storage facilities. Due to lack of adequate and scientific storage facilities in rural areas, stocks are being maintained in towns only. Village structure in India In our country, the village structure itself causes many problems. Most of the villages are small and scattered. It is estimated that 60 per cent of the villages are in the population group 15 of below 1,000. The scattered nature of the villages increases distribution costs, and their small size affects economic viability of establishing distribution points. Rural markets and sales management Rural marketing involves a greater amount of personal selling effort compared to urban marketing. The rural salesman must also be able to guide the rural customers in the choice of the products. It has been observed that rural salesmen do not properly motivate rural consumers. The rural salesman has to be a patient listener as his customers are extremely traditional. He may have to spend a lot of time on consumer visits to gain a favourable response from him. Channel management is also a difficult task in rural marketing. The distribution channels in villages are lengthy involving more intermediaries and consequently higher consumer prices. In many cases, dealers with required qualities are not available. Inadequate banking and credit facilities: In rural markets, distribution is also handicapped due to lack of adequate banking and credit facilities. The rural outlets require banking support to enable remittances, to get replenishment of stocks, to facilitate credit transactions in general, and to obtain credit support from the bank. Retailers are unable to carry optimum stocks in the absence of adequate credit facilities. Because of this problem, they are not able to offer credit to the consumers. All these problems lead to low marketing activities in rural areas. It

is estimated that there is one bank for every 50 villages, showing the poor banking facilities in rural areas. Market segmentation in rural markets Market segmentation is the process of dividing the total market into a number of sub-markets. The heterogeneous market is broken up into a number of relatively homogeneous units. Market segmentation is as important in rural marketing as it is in urban marketing. Most firms assume that rural markets are homogeneous. It is unwise on the part of these firms to assume that the rural market can be served with the same product, price and promotion combination. Branding The brand is the surest means of conveying quality to rural consumers. Day by day, though national brands are getting popular, local brands are also playing a significant role in rural areas. This may be due to illiteracy, ignorance and low purchasing power of rural consumers. It has been observed that there is greater dissatisfaction among the rural consumers with regard to selling of low quality duplicate brands, particularly soaps, creams, clothes, etc. whose prices are often half of those of national brands, but sold at prices on par or slightly les than the prices of national brands. Local brands are becoming popular in rural markets in spite of their lower quality. Packaging As far as packaging is concerned, as a general rule, smaller packages are more popular in the rural areas. At present, all essential products are not available in villages in smaller packaging. The lower income group consumers are not able to purchase large and medium size packaged goods. It is also found that the labelling on the package is not in the local language. This is a major constraint to rural consumers understanding the product characteristics. The rural marketing products and strategies of the following insurance companies have been studies in depth to get a better understanding

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ADITYA BIRLA SUN LIFE INSURANCE

RURAL MARKETING PRODUCTS AND STRATEGIES A large population of India lives in the rural areas. The impact of risks associated with life and health are far more severe on this population as compared to the urban population with higher levels of income. Birla Sun Life launched its rural program in 2001 to provide insurance to the rural populace of India. This includes the endowment product that provides life cover and guarantees returns to the insured on maturity. By virtue of the benefits it provides, this product has been very well accepted and has gone on to become the most popular product in the rural areas. With changing times and with increasing disposable incomes in rural areas, we improved our solutions to the rural population and launched two Micro Insurance Products in 2008 which include a pure term and return of premium products. One of the unique features of these products is that they provide a grace period of 180 days as opposed to 30 days for other similar plans in the market. This gives policyholders the flexibility to pay premiums. BSLI Bima Dhan Sanchay This plan provides the security of life insurance cover and also guarantees the refund of premiums paid by you on maturity. Security plus Guarantee. The refund of premiums paid by you is guaranteed with 3 maturity options. Birla Sun Life Insurance Bima Dhan Sanchay apart from providing the security of life insurance cover also guarantees the refund of premiums paid by you on maturity. Thus BSLI Bima Dhan Sanchay provides a win-win situation. This plan is simple and convenient with no medical tests and minimum documentation. BSLI Bima Suraksha Super BSLI Bima Suraksha Super provides you life insurance cover for which you have to pay regular premium. The nominee gets the sum assured in the unfortunate event of death. This plan is simple and convenient with no medical tests and minimum documentation.

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BSLI Bima Kavach Yojana A three year plan with death, maturity and surrender benefits designed especially for the rural population. Birla Sun Life Insurance believes in undertaking concerted efforts in the direction of helping the economically weaker section of the society. They have designed 'Birla Sun Life Insurance Bima Kavach Yojana' plan keeping in mind the paying capacity and the needs of the rural population. They are working in close coordination with the Aditya Birla Group Units and various N.G.O's, located across India to provide the rural insurance services to the rural population. The Plan It is a three year plan. Premium is paid only once in 3 years. It has three benefits: Death Maturity Surrender Birla Sun Life Insurance Bima Kavach Yojana Eligibility How much do you pay Duration of the plan Rural people between the age of 18 years to 50 years are eligible for this plan A fixed one-time payment of Rs.50/- or Rs.100/- or Rs.200/- as per the paying capacity of the rural mass. 3 years

Features Any time surrender facility No special medical check up required Simple Application form and easy documentation process. Rural Marketing strategy IRDA stipulates that at least 7.5% of life policies in the second year should be from rural population. Gradually the percentage reaches 15% by the fifth year of operation. Birla Sun Life Insurance is actively pursuing its rural marketing strategy, because within three years, the company wants to convert this operation into a viable business Birla Sun Life Bima Kavach Yojana will be marketed through village level contacts. To create awareness about its insurance product, the company has appointed Village Extension Workers (VEWs). Typically, VEWs are people from the local Aditya Birla Group Companies that are involved in social improvement projects. The VEWs act as liaison points between villagers and Insurance Advisors. Each VEW will be in charge of a cluster of 10-15 villages and will act as a first level underwriter and introducer of Bima Kavach Yojana.

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"Better personal contact is the key differential between our rural strategy and that of others. We firmly believe that Bima Kavach Yojana is the right product for Rural India. Our people believe implicitly in our vision and are working diligently towards making life safer and better for our target audience" said Mr. Vijay Singh, Director, Birla Sun Life Insurance. Birla Sun Life Insurance Company is a Joint Venture between the Aditya Birla Group and the Sun Life Financial. Birla Sun Life to tie up with Syndicate Bank for bancassurance Birla Sun Life Insurance is close to striking a deal with the state-owned lender, Syndicate Bank, for a partnership in the life insurance business. The Aditya Birla group company has offered 600 crore as advance commission based on future sales to Manipal-based Syndicate Bank, which will use part of the money to buy 6% stake in the life insurance firm, said a person familiar with the transaction. The deal structure will enable the Syndicate bank to pick up a minority stake in the lucrative life insurance sector without dipping into its capital reserves. In recent years, the Reserve Bank of India has discouraged a few banks from investing in the cash-guzzling insurance business. "It's at the final stage...Talks are on to arrive at a valuation," said the person. Syndicate Bank has sent the proposal to the government, its main stakeholder, for approval and a formal announcement is expected soon, the person said, not wanting to be named. The deal will give Birla Sun Life access to 2,500 branches of the commercial bank. Besides, 600 regional rural banks where Syndicate has a stake can be used to market Birla Sun Life products. Many insurance companies are keen to pursue the bancassurance model to expand sales by entering into equity or strategic partnership with commercial banks.

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TATA AIG LIFE INSURANCE SOLUTIONS A.TATA AIA LIFE INSURANCE

MICRO INSURANCE PRODUCTS AND STRATEGIES Insurance is an important savings tool for people living in small towns and villages. The nature of their job exposes them to numerous financial risks making them vulnerable to heavy losses. Moreover, an unfortunate demise of the principle wage earner or disability due to illness or accident can be devastating in most families as it can wipe out their savings leaving them without any resources to start over. Micro Insurance products from Tata AIA Life can help reduce the effects of financial losses by providing adequate financial cover. These products, which simplify the product offerings and provide financial security, are specially designed to meet the needs of low income groups by offering benefits like low premiums, simple policy terms and exclusions and no medical examinations. Tata AIA Life Navkalyan Yojana Tata AIA Life Navkalyan Yojana is a non-participating, life insurance protection plan without any maturity benefit. Key Features Policy Term of 5 years Death Benefit paid to the nominee in case of unfortunate death of life insured Option to choose Life Cover from a minimum of Rs.5,000 to a maximum of Rs.50,000 Cover against death due to accident by opting for Tata AIA Life Accidental Death Benefit Rider at a nominal extra cost Premium payment frequency: Monthly, Quarterly, Semi-annual & Annual Tata AIA Life Ayushman Yojana A non participating single premium plan, Tata AIA Life Ayushman Yojana is ideal for rural population who have seasonal income. With payment of a single premium at the beginning of policy term, a person will be insured for 10 years. Besides being insured, the policyholder, upon maturity of the policy receives 125% of the single premium paid. Key Features Convenience of single premium payment Policy Term of 10 years Death Benefit paid to the nominee in case of unfortunate death of life insured Option to choose Life Cover from a minimum of Rs.5,000 to a maximum of Rs.50,000 On maturity, get 125% of the single premium paid

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Tata AIA Life Sampoorn Bima Yojana Tata AIA Life Sampoorn Bima Yojana is a non-participating, affordable term insurance plan, which apart from providing security of life insurance cover also guarantees refund of all premiums upon survival till the term of the policy. In this plan you pay premiums only for 10 years, where as you enjoy the coverage up to 15 years. Key Features Death Benefit paid to the nominee in case of unfortunate death of life insured On maturity at the end of 15 years, all premiums paid will be returned# to the policyholder. Option to choose Life Cover from a minimum of Rs.5,000 to a maximum of Rs.50,000 Pay premiums for 10 years and stay covered for entire policy term of 15 years Premium payment frequency: Monthly, Quarterly, Semi-annual & Annual. Tata AIA Life Sumangal Bima Yojana To encourage saving from individuals who prefer getting periodic returns, Tata AIA Life brings an insurance plan that goes hand in hand with regular savings. Tata AIA Life Sumangal Bima Yojana, a non-participating limited premium payment money back plan, gives guaranteed returns* at specified intervals during term of the policy besides an insurance cover for 15 years. Key Features Survival benefits$ of 10%, 20% and 30% of Total Policy Premiums payable at 6th, 9th and 12th policy anniversaries respectively Periodic payments do not affect the Sum Assured payouts in case of the insured's death On maturity, 60% of the Total Policy Premium is payable* Death Benefit paid to the nominee in case of unfortunate death of life insured Option to choose life cover from minimum of Rs,5000 to a maximum of Rs.30,000/ Limited premium payment term Premium payment frequency : Monthly, Quarterly, Semi-annual & Annual

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B. TATA AIG GENERAL INSURANCE Motor Insurance Insurance covers for the following automobiles used by Rural India: Tractors: All makes & models of Agricultural tractors / Trailers/ Trolleys/ Implements Two Wheelers: All makes & models of Scooters & Motorcycles Private Care: Vehicles privately owned, for captive use Commercial Vehicles: Coverage for o Goods Carrying vehicles various makes and models of vehicles upto 25 tonnes o Passenger Carrying vehicles - Vehicles privately owned, for captive use o 3-Wheelers: Passenger vehicles and goods carrying vehicles. Coverage under Motor Insurance Own Damage (Loss arising due to Physical Damage to the Vehicle in the accident Cost of Repairs & Replacements) Loss or damage to vehicle & its accessories by o Fire, explosion, self ignition or lightning o Burglary, housebreaking or theft o Riot and strike o Earthquake ( Fire and shock) o Flood, typhoon, storm, inundation, cyclone, hailstorm o Transit by road, rail, inland waterway, lift, air o Accidental external means o Malicious act o Terrorist act o Landslide or rockslide Property Insurance Insurance covers for the following in Rural India: Home Shops & Outlets Schools Machinery (Pump sets) Covers Loss or damage to building & contents against: Fire Lightning Explosion/Implosion Aircraft Damage Riot, Strike and Malicious damage Impact damage by Rail, Road, vehicle or animal Subsidence and landslide including rockslide, earthquake, flood, storm inundations etc. Bursting, overflowing of Water Tank and Pipes Missile Testing operations Bush Fire
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Livestock (Cattle) Insurance Insurance cover for cattle against death due to: Diseases Accidents Natural calamities Riots, Malicious damage, terrorism Permanent loss of milk yielding capacity due to disease. Personal Accident Insurance Personal Accident insurance for the rural population covers the following: Accidental Death (10% of Sum Insured for < 17 year old) Accidental Dismemberment (incl. loss of sight & hearing) Disappearance (where body cannot be located) Emergency Accident Medical Expense Repatriation of Remains / dead body Permanent Partial Disability Accident Hospital Cash Permanent Total Disability Tuition Benefit (Education Benefit) Rural Marketing Strategy Rural India is often faced with risks linked to lifestyle of people living there. There is a growing need for the Rural mass to be educated on insurance solutions that will help them take care of the risks be it their automobiles, health, property or livestock. Tata AIG offers a variety of Rural Insurance products covering risks of this nature. Standardization of services up to the last mile Proper risk management and better portfolio management which is fundamental to a successful & sustainable insurance program Independent claims processing team to process valid claims promptly on submission of relevant claim documents Our hi-tech risk management expertise will help reduce premium rates in the long run, much to the benefit of the customer Quick product development in line with market needs Uniqueness 84 sales offices across the country covering all major cities of India Network of affinity partners, brokers & over 2250 dedicated agents to service customers Tata AIG Firsts- Benchmarks of general insurance sector: o Mobile claims service o Toll Free Helpline service o Settled over 500,000 claims o Claims registration & policy renewals by SMS o Direct payment to garages for auto insurance.
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CHOLA MS GENERAL INSURANCE

RURAL MARKETING PRODUCTS AND STRATEGIES Health Insurance They offer affordable and customized family floater health insurance cover to rural population of the country through various channels like MFIs, NGOs and also organizations involved in Financial Inclusions They are also actively involved in Rashtriya Swasthya Bima Yojana (RSBY) scheme, Central-State Govt's joint social healthcare scheme for providing Health Insurance for BPL families across the country, wherein more than 32 Lakhs families which are below poverty line (BPL) across various states like Gujarat, Maharashtra, Jharkhand, Bihar and West Bengal have been covered and benefited. Personal Accident Insurance Personal Accident Insurance covering Death, Permanent and Partial Total Disability along with hospitalization cash benefits to cover the rural populace. Critical illness Insurance To cater to the treatment cost/financial sustainability in case of listed critical illness is contracted. Tractor / Commercial Vehicle / Motor / Farm Inputs Insurance A product specifically designed for catering to rural requirement Micro Insurance They work with various Micro Finance organizations working in the hinterland collaborating with SHGs (Self Help Groups) who provide insurance advisory services to the rural customers at their doorstep Combined / Composite Product Insurance A package policy offering a one stop solution for various protections needs of rural families which includes Health Insurance, Accidental Insurance, Dwelling Insurance etc. is offered under a single policy Weather / Input Based Crop against Act Of God perils They are empanelled by the Government of India for WBCIS Scheme for Non Loanee farmers being implemented in various states Cattle Insurance An insurance policy to provide insurance to cattle-breeding community of rural India to cover their milch-Cows / Buffaloes, Calves / Heifers, Stud Bulls & Bullocks etc; thus providing their prime livelihood source a financial protection in case of death or disability caused to cattle due to accident or disease.

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LIFE INSURANCE CORPORATION OF INDIA

RURAL MARKETING PRODUCTS AND STRATEGIES Jeevan madhur Features It is a simple savings related life insurance plan where you may pay premiums regularly at weekly, fortnightly, monthly, quarterly, half-yearly or yearly intervals over the term of the policy. Minimum instalment premium for different modes of premium payment shall be: Weekly: Rs. 25/Fortnightly: Rs. 50/Monthly: Rs. 100/Quarterly/Half-yearly/Yearly: Rs. 250/Further, the premium chosen by you shall be subject to the minimum and maximum sum assured of Rs. 5,000/- and Rs. 30,000/- respectively payable on death and maturity under this plan. Jeevan mangal Features LICs Jeevan Mangal is a term assurance plan with return of premiums on maturity, where you may pay the premiums either in lump sum or regularly at Yearly, Half Yearly, Quarterly, Monthly, fortnightly or weekly intervals over the term of the policy. Jeevan deep Features It is a simple savings related life insurance plan with Guaranteed Additions where you may pay premiums either in lump sum or regularly at monthly, quarterly, half-yearly or yearly intervals over the term of the policy.

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MAX BUPA HEALTH INSURANCE

RURAL MARKETING PRODUCTS AND STRATEGIES Swasthya Pratham Micro Health Insurance plan Max Bupa's "Swasthya Pratham" Micro Health Insurance plan is an affordable group plan specially designed for rural and semi urban India. "Swasthya Pratham" not only provides a basic health insurance cover in case of hospitalisation but can also be customised with additional coverages, allowances and waivers to suit the needs of rural and social groups. "Swasthya Pratham" addresses the need of rural and semi urban India to cover direct medical costs such as fees for consultations, laboratory tests, medicines, hospitalization, delivery, etc.; direct non-medical costs such as costs for transportation, food in case of hospitalization; and indirect costs such as loss of wages for both the patient and the attendant. "Swasthya Pratham" helps its members in proactively taking care of themselves, their spouse and children. The following are some of the salient features of Swasthya Pratham: Base cover includes in-patient hospitalization, select day care procedures and pre and post hospitalization expenses. Cashless treatment at specially designed network of hospitals in rural and semi urban India Coverage can be enhanced by adding supplementary riders for Maternity, Accidental Death and OPD. Coverage can be further customized by using cash allowances for wage loss, food transport, care taker. Waivers can also be obtained for waiving initial waiting period, pre-existing disease exclusion and specific exclusions. Cashless treatment available in quality network hospitals and healthcare providers. Wide range of sum insured options - from Rs. 5,000 to Rs. 30,000 for Individuals and Rs 10,000 to Rs 30,000 for family floater policies. Coverage available from age 3 months to 65 years for families with no exit age. The Swasth Parivar Health Insurance Plan The Swasth Parivar Health Insurance Plan is designed to give you peace of mind, this affordable plan promises to protect your savings and cover your family by being there for you all the time. Features 1. Cashless facility at quality network hospitals The cashless facility at their quality network hospitals is very useful because in emergency you must visit a doctor, not run around to arrange cash. 2. Assured policy renewal for life Renewal is assured for life as we believe in lifelong relationships. At renewal your premium are not linked to your claim history.

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3. All day care procedures covered They cover those treatments which require hospitalization of less than 24 hrs so that you don't have to choose what's best for you and your family. 4. Emergency ambulance They pay for ambulance in emergency situations 5. Swasth Parivar Health Insurance Plan can be issued to an individual or to a family. This policy is available in two variants - Individual and Family Floater

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AGRICULTURE INSURANCE COMPANY OF INDIA LIMITED

RURAL MARKETING PRODUCTS AND STRATEGIES National Agricultural Insurance Scheme Features 1. Farmers to be covered All farmers including sharecroppers, tenant farmers growing the notified crops in the notified areas are eligible for coverage. The Scheme covers following groups of farmers: A. On a compulsory basis All farmers growing notified crops and availing Seasonal Agricultural Operations (SAO) loans from Financial Institutions i.e. Loanee Farmers. B. On a voluntary basis All other farmers growing notified crops (i.e., Non-Loanee farmers) that opt for the Scheme. 2. Risks covered & exclusions Comprehensive risk insurance will be provided to cover yield losses due to non preventable risks, viz.: A. Natural Fire and Lightning B. Storm, Hailstorm, Cyclone, Typhoon, Tempest, Hurricane, Tornado etc. C. Flood, Inundation and Landslide C. Drought, Dry spells E. Pests/ Diseases etc. 3. Premium Subsidy 50% subsidy in premium is allowed in respect of Small & Marginal farmers, to be shared equally by the Government of India and State/UT Govt. The premium subsidy will be phased out on a sunset basis in a period of three to five years, subject to review of the financial results and the response of the farmers at the end of the first year of the implementation of the Scheme. The definition of Small and Marginal farmer would be as follows: Small farmer: A Cultivator with a land holding of 2 hectares (5 acres) or less, as defined in the land ceiling legislation of the concerned State/ UT. Marginal farmer: A Cultivator with a land holding of 1 hectare or less (2.5 acres). 4. Area Approach and Unit of Insurance: The Scheme would operate on the basis of 'Area Approach' i.e., Defined Areas for each notified crop for widespread calamities and on an individual basis for localised calamities such as hailstorm, landslide, cyclone and flood. The Defined Area (i.e., unit area of insurance) may be a Gram Panchayat, Mandal, Hobli, Circle, Phirka, Block, Taluka etc. to be decided by the State/UT Govt. However, each participating State /UT Govt. will be required to reach the level of Gram Panchayat as the unit in a maximum period of three years.

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Individual based assessment in case of localised calamities, to begin with, would be implemented in limited areas on experimental basis initially and shall be extended in the light of operational experience gained. The District Revenue administration will assist Implementing Agency in assessing the extent of loss. Benefits The Scheme is expected to: a. Be a critical instrument of development in the field of crop production, providing financial support to the farmers in the event of crop failure. Encourage farmers to adopt progressive farming practices and higher technology in Agriculture. b. Help in maintaining flow of agricultural credit. c. Provide significant benefits not merely to the insured farmers, but, to the entire community directly and indirectly through spill-over and multiplier effects in terms of maintaining production & employment, generation of market fees, taxes etc. and net accretion to economic growth. d. Streamline loss assessment procedures and help in building up huge and accurate statistical base for crop production. Weather based crop insurance scheme Weather Based Crop Insurance aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on account of anticipated crop loss resulting from incidence of adverse conditions of weather parameters like rainfall, temperature, frost, humidity etc Modified National Agricultural Insurance Scheme (MNAIS) 1. Objectives I. To provide insurance coverage and financial support to the farmers in the event of prevented sowing & failure of any of the notified crop as a result of natural calamities, pests & diseases. II. To encourage the farmers to adopt progressive farming practices, high value in-puts and better technology in Agriculture. III. To help stabilize farm incomes, particularly in disaster years. 2. Salient features of the scheme In addition to Agriculture Insurance Company of India Ltd., Private sector insurance companies with adequate infrastructure and experience will be allowed on selective basis to implement the scheme by the implementing States from out of the companies short listed by the Department of Agriculture & Cooperation.

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Varsha bima / rainfall insurance Background Sixty five percent of Indian agriculture is heavily dependent on natural factors, particularly rainfall. Studies have established that rainfall variations account for more than 50% of variability in crop yields. Its known that yields are variable, however, its now being realized that the weather, particularly rainfall is also becoming increasingly unpredictable and uncertain. Although there is no way of controlling weather-factors, there is now a hope of mitigating the adverse financial effects that rainfall can have on the rural economy, particularly farm incomes. Scope Varsha Bima covers anticipated shortfall in crop yield on account of deficit rainfall. Varsha Bima is voluntary for all classes of cultivators who stand to lose financially upon adverse incidence of rainfall and they can take insurance under the scheme. Initially Varsha Bima is meant for cultivators for whom National Agricultural Insurance Scheme (NAIS) is voluntary and Weather based Crop Insurance Scheme (WBCIS) is not available. Period of Insurance The insurance operates during June to September for short duration crops; June to October for medium duration crops; and June to November for longer duration crops. Further, these periods are State-specific. In case of Sowing Failure option, the risk period is usually from 15th June to 15th August. Weather Insurance (rabi) 1. Provides protection against adverse deviations in a range of weather parameters like frost, heat, relative humidity, rainfall etc. between December and April. 2. Generic insurance product insuring crops like wheat, potato, barley, mustard, gram etc. 3. Maximum liability is linked to cost of cultivation and varies from crop to crop 4. Allows for speedy settlement of claims, say within 4-6 weeks after the insurance period. Weather Insurance (Rabi) is a mechanism for providing effective risk management aid to those individuals and institutions likely to be impacted by adverse weather incidences. The most important benefits of Weather Index Insurance are: 1. Trigger events like adverse weather events can be independently verified and measured. 2. It allows for speedy settlement of indemnities, as early as a fortnight after the indemnity period. 3. All growers, be it Small /Marginal; Owners or tenants/Sharecroppers can buy this Weather Insurance. Period of Insurance The insurance operates during the months of December to April. However the period is different for different parameters and crops.

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Future Products Sugarcane Insurance Tea Insurance Basmati Rice Insurance Aromatic & Medicinal plants Insurance Contract Farming Insurance

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MAX NEW YORK LIFE INSURANCE

Rural marketing strategy In its bid to capture rural market, Max Newyork Life in March 2002, one of the private insurance players in the country, has identified five districts in different states to set up rural business division, a senior company official said. With IRDA issuing guidelines on social obligation, the company has already set up socialrural business division and appointed 'gram sahayaks,' to spread the message of insurance, Anuroop Tony Singh, CEO and Managing director of the company told reporters here on Monday. The company had adopted selective approach, as far as rural market was concerned and identified four to five districts in different States to promote insurance, he said. Negotiations were on with some banks to have tie-up to sell insurance products through them, he said. Asked on the future of private players in India, Singh said 12 private players had entered the market and had been successful in capturing capture around seven to eight per cent market share. But he pointed out that the gestation period of life insurance was longer, and the results would not be known in a short period. Singh, here in connection with opening of the company's operations, said Max had tied up with Silicon Financial Consultants, to sell its products in the region. On the performance, Singh said the company has sold over 118,000 individual policies and recorded a sum assured of over Rs 4,400 crore up to December 2002 Max New York Life has multi-channel distribution spread across the country. Agency distribution is the primary channel complemented by partnership distribution, bancassurance, alliance marketing and dedicated distribution for emerging markets. The Company places a lot of emphasis on its selection process for agent advisors, which comprises four stages screening, psychometric test, career seminar and final interview. The agent advisors are trained in-house to ensure optimal control on quality of training. The company currently has around 92,667 agent advisors at 712 offices across 389 cities. The company also has 36 referral tie-ups with banks, 24 partnership distribution and alliance marketing relationships each. Max New York Life has put in place a unique hub and spoke model of distribution to deepen our rural penetration. This is the first time such a model has been put in place for rural marketing of insurance. The company has 137 offices dedicated to rural areas.

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Leading private insurer Max New York Life Insurance on Wednesday signed a deal with 3i Infotech for marketing its insurance and savings product Max Vijay in the rural market. The company will distribute its products through 3i Infotech's I-SERV stores in Haryana, Uttar Pradesh, Madhya Pradesh, Gujarat, Maharashtra, Goa, Andhra Pradesh, Tamil Nadu and Delhi. "The tie-up with 3i Infotech will enable Max Vijay to expand its reach to consumers in remote rural areas," the company said in a release. The product is aimed at providing financial security to the rural masses in the country with insurance and savings benefits, for investments starting at only Rs 1,000, Rs 1,500 and Rs 2,500. "Our association with 3i Infotech is a part of our strategy to strengthen our presence across the country and help the underserved, to work towards building a financially secure nation," Max New York Life Chief Operating Officer Rajit Mehta said. Rajesh Sud, the New Delhi-based managing director of insurer Max New York Life (MNYL), likes targets. This year, he wants his sales team to sell 250,000 Max Vijay products, the insurance line it launched in 2008 designed specifically for low-income households in India. That's a big leap from the 85,000 Max Vijay policies that his team has already sold over the past year. While MNYL is one of the country's top 10 largest insurers (with US$2 billion assets under management), around 80% of all its policies are sold to urban, rather than rural, customers. Of the total 4.3 million policies MNYL has sold since it was set up as a joint venture between Max India and New York Life Insurance Company eight years ago, 650,000 policies have been sold to the country's hinterland in addition to its Max Vijay products. Sud says, "It's a given" that MNYL is "part and parcel" of the rural India story. However, it's not a given that MNYL -- or any other companies in India's US$13 billion insurance sector, such as SBI Life, Bajaj Allianz and ICICI Prudential -- have an easy time hitting growth targets in rural India. Insurance isn't a product that many of rural India's millions of poor feel they need, let alone can afford. But the insurance companies need them. By law, a certain percentage of the policies that India's insurance companies write -- which is determined by the number of years an insurer has been operating -- must be based in rural India. In MNYL's case, the requirement is 19%. Thus far, India's insurers have been taking one of two routes. They either fulfill their legal requirements by simply pushing the same stable of products in rural India that they do in the more lucrative urban markets, without expecting to turn much of a profit or build substantial market share. Or they do what MNYL is striving to achieve: Design a robust, profitable rural business model around new, tailored products and services for customers in the hinterland. But to make the latter plan work, as Sud knows, the likes of MNYL are facing a wide range
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of challenges, including figuring out how to help their rural businesses reach the right level of scale so that products like Max Vijay can be sold economically and efficiently. Capturing the 'Loose Change The Max Vijay story began in 2006, when Rajit Mehta, its current chief operating officer, attended an international executive management program. Impressed by a presentation about how a company developed a number of new products and services within a niche sector, Mehta returned home to apply what he learned to the insurance business, which hadn't had much success reaching the country's millions of rural consumers. "We wanted to capture their loose change, which was being spent on smoking or other non-essentials," says Anisha Motwani, executive vice president and chief marketing officer of MNYL. But how could it do that? At the time, according to New Delhi-based National Council for Applied Economic Research, 78% of rural Indians were aware of insurance, but less than 19% of rural households owned a policy. Meanwhile, MNYL's own on-the-ground research found that rural consumers were keen to build up their savings for a rainy day but didn't do it for reasons ranging from uncertainty about the documents needed for opening a savings account to the day-to-day challenges that distracted them from taking precautionary measures for their future. The insurer also learned that this new customer base was not averse to buying insurance, provided policies were easy to understand and didn't require regular payments, while allowing them to withdraw their money for emergencies with little or no penalty and giving them investment opportunities alongside guaranteed life protection. It also recognized the importance of having a local sales force dedicated to these customers, but with the same focus on volume-based incentives as their urban counterparts. Today, MNYL employs 600 rural and 9,400 urban sales managers, with each having about 10 local agent advisers reporting to him. While the advisers work on a purely commission basis, the sales managers have a variable component in their salary depending on the number of policies his advisers sell. Thanks to all this research, "we saw opportunities from the commercial and corporate social responsibility standpoints in serving the underserved," says COO Mehta. The result is the Max Vijay range of products tailored to the likes of Dhanaraja Thiruchelvam. He owns a small grocery stall selling betel leaves, bidis (local cigarettes rolled in dry leaves), soaps and prepaid mobile phone cards in the Pulivendala district of Andhra Pradesh state. Earning between US$10 and US$22 a month, he bought a Max Vijay policy last year and has topped it up three times. Thiru, as his friends call him, plans to hold off making further payment for a while as he saves up for English lessons for his 10-year-old daughter. "Max Vijay's 'as and when' payment option doesn't stress me out," he says. Unlike with most other insurance products, Max Vijay doesn't require policy holders to make monthly, quarterly or annual payments. Rather, to accommodate their erratic income flow, customers can invest as little as US20 cents of their surplus cash whenever they can. Among
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the three offerings -- Max Rajat, Swarna and Heera -- the enrollment premium ranges between US$20 and US$50 for 10-year coverage, and at the end of 10 years the customer receives a final balance as a maturity benefit. The life cover is five times the amount invested in case of natural death and 10 times for accidental death. What's more, the actual process of purchasing and managing Max Vijay products is easy. They are sold over-the-counter at small, local retail stores, much in the same way that units for mobile phones are sold. The good thing about a Max Vijay product is that "it's designed for a touch-and-feel customer base," says Rohan Sachdev, a financial services partner at Ernst & Young in Mumbai. "It's a simple, tangible product delivered to your doorstep." For sure, as other companies catering to rural India are learning, "simplicity is always a virtue, but more of a virtue for low-income families," says Jeremy Jacobman, professor of business and public policy at Wharton, who has helped insurers such as ICICI Lombard and non-profit organizations develop micro insurance in India. Putting the Customer in Control MNYL's Max Vijay has been a catalyst for "a huge paradigm shift for India, where most insurance companies largely tweak or transplant their urban products for the rural terrain," says S. C. Dash, professor of rural insurance at the National Insurance Academy (NIA), the country's apex training institute in Pune, Maharashtra. "Now it's time for reverse engineering, working backwards from the customer to the product." Yet as well intentioned as it might be, such "reverse engineering" in rural India can be hard to get right. COO Mehta says Max Vijay's "disruptive business model" was expected to "create a movement where consumers would flock to buy the product." But that hasn't been the case yet. "We overestimated our ability to create 'pull,'" as opposed to the traditional push practice of distributors and suppliers driving consumers to the products. The company initially was aiming for US$33 million of first-year premiums in its first three years, but it's been a struggle. The targets were based on economies of scale because margins for such products typically range from 2% to 4%, compared with the margins of 14% to 16% of unit-linked insurance plans. Mehta declines to say what the revised targets are but notes that Max Vijay is now focused on a four-year break-even. Part of the reason why Max Vijay missed early targets is that it lacked a substantial distribution network. Its main distribution partners have been local rural banks whose networks are limited. Unlike most major insurance companies in India, MNYL is not owned by a big banking parent, which serves as a distribution springboard as, for example, ICICI Lombard and ICICI Prudential do when they leverage the 1,615 branches of parent company ICICI Bank.

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"Often, when you have such low volumes, there is very little money left for distribution," says Jacobman. "My observation is that finding effective partners already working in villages brings down marketing and distribution costs considerably." MNYL agrees, which is why it initially took a multi-pronged distribution approach. It enlisted the help of a plethora of partners that already had a foothold in the hinterland so it could explore every way of reaching low-income households. "It is a people-intensive business, and choosing the right candidates is critical, particularly for a rural business" whose customers value local knowledge and a familiar face, says Motwani. But MNYL learned that not all of the partners -- such as a milk marketing company and Mahindra Finance, the financial arm of auto and tractor maker Mahindra & Mahindra -- were as focused on the parts of the underserved market as it was.

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RECENT NEWS AND DEVELOPMENT Life insurance industry targeting rural sector Life insurance companies are increasingly targeting the rural segments to increase business as for the first time since the privatisation of the industry in the year 2000, new premium income has reported a negative growth in the past fiscal year. This was due to the effects of the global slowdown affecting the overall investment sentiments in the Indian urban sector. The relatively untapped rural markets are getting attention because the potential is huge and the penetration is very low. Talking to Deccan Herald, Aegon Religare Life Insurance Chief Marketing Officer Yateesh Srivastava said, "There has been a large degree of rural prosperity in the past eight to ten years so the market potential is definitely there." Insurers have lined up plans to aggressively increase their market share and are also launching cost-effective models to taget this segment. Max New York Life Insurance has asked agents to do need based selling. After analysing the client's needs, they customise the products. The insurer is asking agents to find out how much life insurance a person would need to cover their needs and provide a policy accordingly. "These people have limited resources and want to utilise them in an optimal manner so we provide a policy according to their needs," said Max New York Life Executive VicePresident & Head for Emerging Markets, R P Singh. Bajaj Allianz Life Insurance has put a cap on the size of the policy sold in rural areas to increase the number of policies sold so that agents do not focus on large ticket policies due to the high commissions involved. Bharti AXA Life Insurance Company Chief Executive Officer Nitin Chpora said, "In rural areas we have single premium policies where the charges are relatively low as we have observed that the premium-paying capacity of people residing in rural areas is lower."

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CONCLUSION Insurance is an integral part of any personal financial plan. The type of insurance and the amount of coverage you obtain all depends on your unique financial and family circumstances, and must be evaluated carefully. Rural market has an untapped potential like rain but it is different from the urban market so it requires the different marketing strategies and marketer has to meet the challenges to be successful in rural market. Rural marketing will grow in importance in the coming years. Agricultural insurance can only deal with the remaining part of production risks that cannot be managed using cost-effective mitigation measuresUnderdeveloped agriculture cannot be developed or restored purely by the introduction of an insurance programAgricultural insurance has no purpose without viable agriculture and conversely, viable agriculture could not exist without adequate insurance. The farming community in India consists of about121 million farmers of which only about 20percent avail crop loans from financial institutions and only three fourth of those are insured. Most of the farmers are illiterate and do not understand the procedural and other requirements of formal institutions and therefore shy from them. Therefore institutional loaners are insured compulsorily under the NAIS. This is quite an indication of the enormous insurance potential that exists for addressing the needs of the rural community. This also signifies the tremendous potential of rural insurance in the country as a concept which can mitigate the adverse impacts those uncertainties would have on individual villagers.

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