Challenges in Microinsurance Execution

IndiaStack is easily one of the most ambitious, futuristic public digital infrastructures the world has seen. Aadhaar covers 1.3B+ people. DigiLocker has 440M users. UPI clocks 10B+ monthly transactions. e-KYC, eSign, Account Aggregator, Health IDs; we’ve built an infra stack that’s interoperable, open, and population-scale. But here’s the catch: while the infra is world-class, the products built on top of it are still catching up. This is the classic infra-product gap. We nailed the backend, but the user-facing value layer, the one that solves for specific use cases across India, is still thin. There are some early productisation wins like neobanks using e-KYC + UPI, credit startups building on Account Aggregator, health platforms experimenting with DigiLocker-stored records. But we’re yet to see mass-scale commercial success across other sectors like micro-insurance, rural credit, or telemedicine. The major reason of this is that the barriers aren’t technological anymore. They’re structural. There’s a deep design-for-Tier 2/3 challenge. Low literacy, limited digital access, and lack of trust still define user behaviour in Tier II/III and rural India. Meanwhile, IndiaStack-based products often get stuck navigating fragmented regulatory layers. A product using health records via DigiLocker needs to clear vastly different policy filters than a fintech app using e-KYC. Add to that: monetisation is hard. Infra like UPI and Aadhaar is low-cost or free. Building for segments with low ARPU, limited data, and high CAC often means relying on burn or subsidy models. Most startups don’t have that kind of runway. And even when the infra is there, cross-sector interoperability is patchy. APIs exist, but plug-and-play isn’t plug-and-play in practice. Health data isn’t easily usable in insurance. Financial data isn’t always trusted by lenders. Building a cross-sector product often feels like duct-taping multiple silos. We also haven’t built a wide enough bench of product leaders who know how to design for this unique stack + audience combo. Many early attempts simply digitised old flows. Few reimagined them. This is why we don’t have digital-native micro-insurance that runs on UPI. Or a Tier 2/3-focused HR-tech solution that uses Aadhaar + DigiLocker + Account Aggregator to offer portable benefits. Or a health platform that can use digital health IDs and eSign to coordinate rural care. We have the rails. But we’re still waiting for the right trains, the right playbooks, the right incentives. Productisation isn’t just the next chapter of IndiaStack. It’s the main event. And if we don’t bridge the gap soon, the infra might just become infra: incredible, but underused. #india #indiastack

No. of farmer families with insurance has jumped from 26% to a huge 86% in 5 years! 🌾 With over 58% of the Indian workforce (that’s as many as ~600 million people) engaged in agriculture, ensuring that our farmers can thrive is more essential now than ever. Yet, many face daunting challenges - from unpredictable weather to rising costs - that can threaten their very existence. So, when I read the recent report from NABARD (National Bank for Agriculture and Rural Development), I felt hopeful. More and more farmers are understanding the importance of insurance, and protecting what’s their own. Insurance applications under the PM Fasal Bima Yojana (PMFBY), a crop insurance scheme, too have surged from 5.3 crore in 2018 to an astounding 14.2 crore in 2023! These aren’t just numbers; they represent families who can now face the future with a little more confidence. And this matters because farming is often like a gamble with nature. Imagine a farmer pouring every rupee they have into seeds, fertilisers, and equipment, only to watch it all wash away in a storm. Without insurance, many end up drowning in debt, taking high-interest loans, or even selling their possessions just to recover. But challenges definitely remain. Delays in insurance claims, disputes over yield data, and a lack of local support mean farmers sometimes wait months - if not years - for relief. In the meantime, their livelihoods are in jeopardy. So what can we collectively do? 🔺 As an insurance sector, we need to spend some more time designing affordable microinsurance products that cater to small farmers with lower incomes. Leveraging technology to streamline claims and gather real-time data can help make payouts faster and fairer. 🔺 The government has a role to play too, running awareness campaigns to inform farmers about the benefits of insurance and simplifying the application process. Local offices with knowledgeable agents who can guide farmers through these systems would be great too. Together, I do feel we can bridge the gap and make sure insurance actually delivers on its promises. Let’s stand together to ensure that every farmer in India can cultivate not just their fields but also their dreams. :) Your views on this? 👇 #agriculture #insurance #farmers #PMFBY #ruralindia #sustainablefarming

A Letter to my Farmers (415) Rethinking Agricultural Insurance: Smallholder Farmers and their Realities must be a Priority The business of agriculture has taken a different dimension in the 21st century. A typical smallholder farmer now operates within a highly volatile environment, constantly battling unpredictable weather, market fluctuations, unavailability of quality inputs, scarcity of labour and unforeseen pests and diseases. For the majority of these farmers, a single bad harvest could mean the loss of either their entire investment or annual income, which could plunge their families into poverty. While agricultural insurance provides its benefits as a risk management tool, widespread adoption and effectiveness amongst farmers remain very low. Thus, there is a need for urgent solutions to salvage the sector. Recently, the gap between the potential of agricultural insurance and its actual impact on farmers has become increasingly evident. Many existing products are designed with commercial farms in mind, leading to premiums that are unaffordable, complex claim processes and coverage terms not aligned with the diverse crops and the farming practices. Thus, when insurance fails to reflect these realities, it remains an abstract concept rather than a practical safety net. Therefore, there is an urgent need to rethink how agricultural insurance is offered and delivered to serve the farmers, but what changes are required to bridge this divide? The answer lies in a redesign of insurance processes to meet the needs and realities of farmers. This begins with simplifying products: moving away from complex indemnity-based insurance to more easily understood models like index-based insurance, where payouts are triggered by observable weather events rather than individual farm assessments. This reduces administrative costs and speeds up claims. Governments and development partners must explore subsidy schemes for premiums, making insurance products cheaper. Innovative distribution channels are also crucial, leveraging mobile technology for registration, premium payments, and claim notifications, which can overcome geographical barriers. Moreover, tailoring products to local contexts, recognizing diverse crop cycles and varying risk profiles.This might involve offering micro-insurance products that cover specific risks relevant to a particular region or crop, rather than one-size-fits-all solutions. In conclusion, these strategies will go a long way to build the resilience of the farmers and stabilize the rural economies. Therefore, we need to transform insurance from a complex burden into an accessible and effective tool for risk management. And this starts from the collaborative efforts of various stakeholders to co-create these solutions. Let us remember that our commitment to empowering smallholder farmers today defines our tomorrow. Yours-in-Service Babatunde #AgriInsurance #RiskManagement #FoodSecurity #Resilience

In a bold move, PhonePe has launched a micro insurance plan offering ₹1 lakh coverage for vector-borne and air-borne diseases like dengue, malaria, and typhoid all for just ₹59 per year. On the surface, this seems like a remarkable leap toward accessible healthcare for millions, especially in Tier 2 and Tier 3 cities where quality care is often a privilege. But is this enough to address the deeper issues plaguing India’s healthcare system? Affordability of this plan is undeniably its strongest selling point. At ₹59, it’s less than the cost of a cup of coffee in urban India, making it accessible to low income households. However, the challenges of implementation and adoption are significant. Many potential beneficiaries still lack awareness about the importance of health insurance, or even trust in digital platforms. Moreover, while ₹1 lakh in coverage is helpful, it barely scratches the surface when facing serious medical emergencies or prolonged treatments. Another hurdle is the digital divide. While the plan’s app based purchase and claim process streamlines insurance access, it assumes users are digitally literate . This excludes a large section of rural India, where healthcare needs are most pressing. Additionally, the plan’s narrow focus on specific diseases, while necessary to keep costs low, leaves out broader health concerns that families face, such as chronic illnesses . So, how do we move forward? First, awareness campaigns must be intensified, not just to promote the product but to educate communities on why insurance is essential. Collaborations with grassroots organizations, local governments, and healthcare workers could help penetrate rural markets and build trust. Second, the scope of such micro insurance plans needs gradual expansion to cover more illnesses and offer greater financial protection. Lastly, policymakers and private players need to view this as a stepping stone, not the destination, in India’s journey to universal health coverage. PhonePe’s initiative is a start, a small but significant step in making insurance accessible. Road ahead demands sustained effort, innovation, and partnerships. True transformation will come when we address not just affordability, but the systemic inequities that keep millions from accessing quality healthcare. Refer attached article for insights ⬇️ #HealthcareChallenges #InsuranceForAll #MicroInsurance #AffordableHealthcare #InclusiveGrowth #InsureTech #LinkedIn

Bangladesh, a nation of over 170 million people, faces a stark reality: more than 90% of its population lacks insurance coverage. This also reflects insurance's contribution to GDP which stands at meager 0.46% in Bangladesh, compared to 4.2% in India and 0.91% in Pakistan. Understandably, insurance remains a luxury for the privileged few. For the majority, healthcare expenses are a crushing burden—often outstripping annual incomes. As Shawon Shahriar, the co-founder and CEO of digital microinsurance platform Chhaya noted, "A significant portion of Bangladesh’s population—a staggering 25% households—spends more than their annual income on healthcare, while 5% households cannot afford it at all. With 97.5% of the population lacking health insurance coverage, the market presented both a challenge and an opportunity." Bangladesh’s insurance market is characterized by high premiums, complicated policies that general people struggle to understand, and limited accessibility. Traditional insurance products, often expensive and laden with complex terms, are out of reach for most. The few who do have coverage are typically corporate employees with employment benefits and a segment of the upper class and upper middle class, leaving the vast majority—informal workers, small business owners, and low-income families—without a safety net. This gap in health financing forces many to forgo proper medical care, resorting instead to quick fixes at pharmacies or self-medication. It was against this backdrop that Chhaya, the micro-insurance platform whose CEO we quoted above, was born. The founders of Chhaya, having worked in the health tech space, recognized the potential of microinsurance to address this critical need. Their vision was clear: to create an insurance model that was affordable, simple, and accessible to all. Read: