18. Micro-Insurance: Types – The Integrated Model

In the Integrated Model of micro-insurance, an institution offers more than one service to its members. One of the various services catered to the members is micro-insurance. Integration of various services has the benefit of satisfying the various demands of the members so as to improve the quality of life of the community at a faster rate. This model has the leverage of making optimum utilization of existing infrastructure and network of existing institutions. In this way, the additional services integrated with the insurance or insurance integrated with other social and financial services increases the effectiveness of all services. In this model, the implementing agency creates a separate unit for operation and management of the added services. There is a possibility of a combination emergency funds, health programme, micro-credit and health insurance.

The advantages of this model are:

• Greater flexibility to adapt the services
• Increase of effectiveness of all services
• Economy of operations: the MIS shares the risk in terms of operational and management costs
• Optimum utilization of existing infrastructure: the MIS does not have to create a separate infrastructure

The disadvantages of the model are:

• Higher level of efficiency for managing different services is required
• If the institutional capacity of the organisation is weak, the MIS can get jeopardised.
• In some organisations, micro-insurance becomes compulsory linked to existing services such as micro-finance, micro-enterprises etc. In this case, members do not have a free choice and are compelled to pay the premium.