Weather Risk to launch community health fund

Hyderabad-based Weather Risk Management Services is setting up a community health insurance fund. It is in talks with multilateral agencies such as United Nations Development Programme (UNDP), leading financial institutions and the Andhra Pradesh government for providing an amount equivalent to the premium contributed by the beneficiaries.

The company will roll out pilot projects in Andhra Pradesh and a few cities outside the state in six months. It will enlist the support of private insurers for settlement of claims, in case of hospitalisation of the insured.

Typically, in a community involving about 50 villages, a fund size of Rs 2.5 crore would be feasible, a senior official from Weather Risk said.

If the average annualised premium per villager is around Rs 500, a community of 1,000 villagers would contribute Rs 5 lakh to the fund.

The assistance under the community insurance programme would be two-fold pronged. In case of illnesses not involving hospitalisation, the fund itself would cater to the member's requirements.

Whereas, in case of situations leading to hospitalisation in urban areas, insurance companies would step in to settle settlement claims, the official explained.

Rural households in India are prepared to fork out only 3-5 per cent of their annual income towards payment of insurance premia, as against 8-10 per cent in European nations.

According to insurers, basic issues in rural insurance include providing coverage for illnesses like malaria or jaundice instead of life-threatening diseases like cancer, transaction costs outweighing benefits and data availability.