The government backed insurance schemes under 'Jan Suraksha' witnessed 80 per cent policy renewals in the second year as auto-debit premium facility ensured policy continuation by subscribers, says a study.
The study covered around 4,000 consumers, 401 bank mitrs (BMs) and 240 claimants in 20 select districts across 11 states/union territories to assess Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).
"As per the assessment, the auto-debit facility for premium payment, linked with customers' savings accounts, has ensured around 80 per cent policy renewals in the second year.
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"In terms of coverage, the Bima Mitrs (BMs)/agents have played a key role in leveraging enrolments and reaching citizens in far-flung areas," according to a study conducted by global financial inclusion consulting firm MicroSave.
Reflecting price sensitivity of Indian consumers, it revealed that 69 per cent enrolled for only PMSBY, 22 per cent for only PMJJBY while only 9 per cent subscribed both schemes.
A low premium of Rs 12 lead to higher uptake for PMSBY against PMJJBY. Women subscribers accounted for as high as 37 per cent of the total enrolment, MicroSave said.
The claim rejection rate stands at a low of 2.5 per cent with no reported leakages, which is laudable for an initiative of such mammoth scale, it added.
A collective of three schemes, Jan Suraksha provides an accidental cover of Rs 2 lakh for an annual premium of Rs 12 under PMSBY; a life insurance of Rs 2 lakh for Rs 330 annual premium under PMJJBY and the contributory based Atal Pension Yojana (APY) that ensures guaranteed retirement benefits.
On the flip side, the study found that there is lack of sustained focus to expand coverage leading to dip in enrolment; almost 50 per cent did not get any acknowledgement receipt for policy, low insurance literacy and limited understanding about the schemes among BMs/agents because of limited capacity building by banks.
Also there is no tracking mechanism so that agents and customers can follow enrolments, renewals and claims.
MicroSave has suggested corrective measures like expanding Jan Suraksha outreach in next 2-3 years through strong mass media campaigns by banks, clubbing Jan Suraksha with PDS and MGNREGS, putting in place mechanism to track policy, capacity building of BMs as well efficient commission payouts.
"Jan Suraksha is the world's largest individual mass- insurance programme. The assessment makes recommendations to strengthen the delivery of the vision behind this innovative initiative," said Manoj Sharma, Director - MicroSave, Asia.
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