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Micro insurance can help India protect its multitudes from risks
Mint Hyderabad
|November 04, 2025
Enable the entry of specialized insurers to speed up the risk coverage of India's uninsured millions
As insurance penetration in India continues to hover around a low 4% of GDP, it is now time for the government and Insurance Regulatory and Development Authority of India (IRDAI) to expeditiously usher in a framework for standalone micro-insurance companies (SAMIs).
These insurers will exclusively offer 'micro insurance products' and to that extent will differ from general insurers, life insurers and standalone health insurers.
In August 2020, the IRDAI published a report of the Committee on the Standalone Micro-insurance Company, which was constituted to study the feasibility of SAMIs in India. After a cross-jurisdictional analysis of the merits of letting SAMIs operate, the panel concluded that their establishment was essential to increase the spread and reach of micro-insurance in India. A move towards the introduction of SAMIs was expected to enable over 500 million Indians below the poverty line to procure financial protection. However, half a decade on, no steps have been taken towards this end.
Specialized SAMIs can provide micro-insurance products for the benefit of people in rural areas and those reliant on India's informal or unorganized sectors for livelihood.
This story is from the November 04, 2025 edition of Mint Hyderabad.
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