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A Case Study of Aviva Life Insurance and Linkages with Microfinance Institutions

India has taken major steps over the last few years to provide basic financial services like banking and insurance to low income clients in the rural areas. Regulatory provisions have been put in place by the authorities to ensure coverage of insurance to disadvantaged section of society. While initially, these provisions were viewed merely as regulatory compliances, insurance companies are increasingly viewing it as an area of opportunity. New market linkages are being put in place and understanding of community based financial institutions is leveraged to reach out to this untapped market.

AVIVA India, a leading global insurance company, has taken initiative and is developing linkages with some leading Microfinance Institutions (MFIs) of India to reach out to this market in a profitable manner. This paper explores some of the nuances of these linkages and makes an attempt to underline the factors responsible for the success and failure of such relationships. The author also tries to assess the impact of these linkages on the clients, intermediary organizations, insurance companies and regulators. Findings from the cases underline the need for a client focused and financially sustainable strategy for tapping this market. The need for investment to develop the market and understand the requirements of clients and intermediaries is also emphasized.

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