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and premiums have been set, AIDMI reconfirms the beneficiaries on
the list and ensures that all the requisite information has been
collated and passed to the insurance companies. Once this is
complete, AIDMI pays the premiums to the insurance companies
on behalf of the beneficiaries, ensuring immediate coverage.
Subsequently, the
Afat Vimo
team begins to collect the premiums
from the beneficiaries. The process is effective but time-consuming
and costly, especially when renewal is optional.
When disaster strikes, the beneficiary immediately informs the
Afat Vimo
team of the occurrence. The team then responds
quickly to process the claim. AIDMI assists beneficiaries in filing
claims properly. Since many
Afat Vimo
beneficiaries are illiterate
or have poor literacy skills, they require this type of assistance.
The need to build this general capability among policyholders is
recognized. Therefore training is provided to help policyholders
understand exactly how they can best use the policy.
Feedback from beneficiaries who have made claims under the
Afat Vimo
policy has been very positive and encouraging. To date,
41 claims have been made, and 23 of these have been success-
fully settled, giving a combined payout of USD5,635. Of the
claims that have been made, ten were for loss of life, 11 for
personal accident (some resulting in fatality, others causing loss
of earnings), two for house fires, and 18 for damage to property
and contents as a result of monsoon flooding.
Success
Microinsurance offers several advantages. It can be a transparent
means of providing compensation against damage, and it
decreases the need for humanitarian aid. Additionally, it offers
those affected by disasters a more dignified means to cope than
relying on the generosity of donors after disaster strikes.
11
Microinsurance may also make tracking trends in vulnerability
and hazards easier when claims are charted with geographic infor-
mation systems.
Part of the success of
Afat Vimo
can be attributed to the afford-
able premium negotiated on behalf of the clients by AIDMI. This
puts insurance within the reach of those who otherwise would
not be able to access conventional insurance services. Similarly,
AIDMI has had a great deal of success in the prompt settlement
of claims, which has translated into client satisfaction and a good
relationship with the insurance companies. It has also contributed
to the good policy renewal rate, which currently stands at 88 per
cent. From an original membership of 829 beneficiaries at the
launch of
Afat Vimo
in August 2004, coverage has grown to a stag-
gering 5,519 members in only 20 months.
Afat Vimo
policyholders
are now spread across several districts in Gujarat, as well as in
Tamil Nadu and Pondicherry in South India.
A particular strength of the
Afat Vimo
scheme is its unified policy
design. Under
Afat Vimo
, life and non-life coverage are brought
While ‘victims’ manage the majority of disaster recovery themselves, microinsurance can help accelerate their efforts
Photo: AIDMI, Jammu and Kashmir earthquake recovery 2005
Afat Vimo
Team
explain scheme to
community
Submission of
premiums to
AIDMI accounts
Demand/need
letter from
beneficiary
Complete
Afat Vimo
forms, collect
respective documents
Beneficiary
list submitted
insurer
Premiums
paid by AIDMI
to insurer
Scheme/policy
design
Potential beneficiary
Capacity building
for insurance
Beneficiary
database created
Collect premiums
from beneficiaries
Afat Vimo
member
for one year
Policy handover
Policy renewal
The
Afat Vimo
operating structure
Source: AIDMI