Empowering Rural Workers: The Role of Insurance Companies in Overcoming the Challenges.

It is projected that by 2047, more than half of India’s population will continue to live in rural areas, and agriculture will remain an important source of employment. That is why it is important to continuously explore ways to increase the power of people working in the agricultural sector, from farmers to laborers and seasonal workers. This segment is exposed to personal and financial risks such as vector-borne diseases such as malaria and dengue (seasonal) and field-related problems such as electrocution, snakebites and accidents.

Ensuring Financial Stability

About 63 percent of India’s current health expenditure is out-of-pocket expenditure (OOPE) and a high OOPE indicates high vulnerability to financial risks, pushing about 7 percent of India’s population into poverty each year. Insurance is therefore important for people living in rural areas because it helps maintain financial stability by providing benefits and mitigating the impact of unexpected circumstances. Insurance coverage increases life expectancy by covering medical expenses for seasonal illnesses and accidents and protects people from OOPE. Additional benefits such as remote consultation and Outpatient Department (OPD) will improve access to health services. Overall, insurance not only protects against financial setbacks, but also promotes well-being by facilitating timely medical procedures and support services.

Barriers to rural workers

In rural and semi-rural India, only 25 percent of the population is insured, and issues leading to low coverage include low insurance awareness, lack of affordable and tailored products, and limited access. In addition, factors such as the lack of human-friendly and transparent reimbursement procedures, limited digital literacy and a weak network of insurance companies make it difficult to obtain insurance coverage comprehensive enough for their needs.

Building trust and awareness

Using digital platforms and tools such as artificial intelligence, IoT, big data and APIs, insurance simplifies insurance processes and improves access to affordable insurance products. Therefore, digitizing existing distribution channels and opening new ones after evaluating the current behavior of the segment remains crucial. The insurance plans are also tailored to the needs of farmers and offer them effective protection with flexible or monthly premiums. In this way, agricultural workers can protect themselves and their families from adverse situations. To increase adoption and awareness, insurance companies often partner with local entities trusted by agricultural workers, such as Farmers’ Producer Organizations (FPO) and village pradhans. Cooperation with these organizations can effectively raise awareness and build confidence in insurance products in this segment because farmers trust and rely on these organizations as their own. In addition, these local entities play an important role in mitigating the reluctance of digital pre- and post-insurance processes such as digital policy issuance, consent acceptance and online claims.

Sustainability in the future. This is where insurance companies with affordable and adequate protection come into the picture. Insurance companies have a knack for innovating and offering customized offers considering accidents, disabilities and health challenges, thus ensuring comprehensive insurance for those involved in the agricultural sector. By bridging the gap between traditional insurance offerings and the unmet demands of this demographic, insurance companies play a key role in improving the overall risk protection and financial security of farmers and rural residents.

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