Feb 12, 2018
Your proposal if off to a nice start.
One thing to consider - how to diversify the risk. Chit funds in slums are like social circles based on trust where the members are usually living in the same slum/neighborhood. Any adverse climate event, say a flood, is likely to affect most of the members, thus spiking the demands on the insurance payout system. Is there a way you can disperse the risk and avoid situations of multiple simultaneous claims within a chit fund?
Mahila Housing Sewa Trust Team
May 18, 2018
Thank you for your comment. A microinsurance fund or corpus will be set aside in a bank on which an annual interest will be accrued.The model works in a way that partly premium for insurance will be paid by subscribers and partly it will come from the interest gained on the corpus. The pay outs will be done from the premium collected. In order to sustain the fund, we propose to limit the number of pay outs depending up on amount that gets collected (premium by subscribers + interest from corpus). Also, as it is an index based insurance, limits will also be set on the amount that can be released during pay outs. We will arrive at this number based on our surveys that we plan to conduct.
MHT has a long standing association with the local city government. As a government designated agency for the flood and earthquake relief response, MHT has designed damage assessment tool, conducted assessment and facilitated distribution of relief material. Thus, the existing partnerships will help to leverage on the government declared compensation and corporate social responsibility funds received from companies/private sector enabling to reduce the burden of pay outs for microinsurance.
In addition to this, we aim to increase the preparedness of citizens to cope with impacts of extreme weather events and reduces the chances of individuals getting affected. This will be done by banking on the existing early warning systems including MHT's low cost flood alarm system, communication to citizens by local government, and MHT's existing initiatives to enhance resilience of the communities. In the long run, these initiatives can help reduce requirement of financial support that is needed post event.
Jul 23, 2018
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