Study On Micro-insurance Business Model

At present, China has accelerated the construction of new socialist countryside, insurance coverage of low-income people in rural areas should be the focus. In the same time, in early 2012, the CPC Central Committee and State Council reemphasized we must adhere to solve the problem of the "three rural" as the most important task, to effectively protect and improve people’s livelihood, accelerate to improve China’s social security system. China is the world’s most populous country, although the three decades of reform and opening up, people’s living standards increased dramatically, there is still a huge number of people living in marginal rural and remote areas. Their income is mainly from agriculture, the low level of income, poor living conditions, but they have to face the constant accidental disability, death, disease and other types of risk. Faced with, these risks, restrictions on their own level of education and capacity, low-income groups often feel helpless, powerless. They cannot afford to pay the high cost of the purchase of commercial insurance, the current social security system cannot cover these low-income people. They are outside of the commercial insurance and social security systems. Despite their high demand on the insurance, but not with its own appropriate protection. The emergence of micro-insurance can just solve this problem.Micro-insurance has developed rapidly in rural areas of developing countries. Started some mutual organizations or funeral associations for their members, and later commercial insurance companies have begun to enter the low-income market to develop micro-insurance. Until now, micro-insurance has become a risk management tool for the low-income people, and gradually become an effective financial tool for poverty alleviation, more and more developing countries have widely used. Micro-insurance is essentially a kind of insurance, follow the basic insurance principle, collect premiums to compensate for the risks borne by the policy-holders, then passed on and spread the risks. Micro-insurance services the special groups, so it is not the same as the traditional commercial insurance, such as low premium, easy to understand insurance terms, for specific risk and so on. China’s current micro-insurance products have a small life insurance, micro-health insurance, and accidental injury insurance.Micro-insurance in China is still at an early and exploratory stage, there are still many problems. Therefore, this paper intend to study the micro-insurance on. the basis of the theory of micro-insurance in the domestic and foreign scholars, learn from the experiences and lessons of the typical foreign countries. And this paper mainly study the micro-insurance business model.This paper consists of five chapters:The first chapter is the Introduction part. This chapter describes the background and significance, the domestic and foreign research situation, the possible innovation and inadequacies. On the research background, emphasizing the global and China’s low-income people on the insurance with greater needs cannot be met, and micro-insurance just can solve this problem. On the significance, stressed to learn from the experiences and lessons of the typical foreign countries, combined with China’s basic national’ conditions, and actively explore the China’s micro-insurance business model. On the domestic and foreign research situation, using the method of literature review, have the literature summary on the course of development of micro-insurance, the basic theory, mode of operation, insurance supervision, risk management.The second chapter is the basic content of the micro-insurance. This chapter describes the definition of micro-insurance, the basic characteristics of micro-insurance and the theoretical basis of micro-insurance. Defined the concept of micro-insurance, first introduce/the several international definitions on the concept of micro-insurance, and then pointed out several issues. Later, summed up some basic features of micro-insurance different from traditional insurance, there are the following seven points:low premiums; as inclusive as possible; simplify the process; easy to understand insurance terms; to protect the specific risks; grouping for efficiencies and access; commercial and social welfare. In addition, there are three theories on the theoretical basis of micro-insurance:the demand theory, the theory of niche strategy, and the theory of Bottom of the Pyramid.The third chapter describes the micro-insurance business model by the theoretical dimension. First, introduce the different categories of micro-insurance business model, and then introduce the three common micro-insurance business model:the partner-agent model, the independent business model and the community-based mutual model.The fourth chapter describes the micro-insurance business model by the International Comparison dimension. Mainly introduce two representative countries:India and the Philippines. Described the following aspects in detail:the main micro-insurance providers, type of product, the sale and promotion of insurance products, premiums collected, insurance claims, risk control, insurance policy and regulatory.The fifth chapter focuses on rural micro-insurance business model innovation. This section describes the development situation of China’s micro-insurance, then pointed out several issues emerged in the process of micro-insurance operations in China, and finally by drawing on the experiences and lessons of micro-insurance business model of the typical foreign countries, combined with their national conditions, make some suggestions from two aspects(Commercial insurance companies and the government)to in order to improve the management mechanism of China’s rural micro-insurance.