Karuna Trust, Karnataka - ZEF

Good and Bad Practices in MicroinsuranceKaruna Trust, IndiaFigure 4.1 Distribution Channels• Most clients are members of Karuna Trust’s self-help groups. These groups disseminateinformation about the scheme and offer a platform for those willing to join. Duringsubscription time, SHG members can pay their premium directly to the local socialworker and receive a receipt (see Annex 4).• If non-SHG members want to join, they can ask an SHG member to forward theirrequest. It will be discussed during a group meeting and in case of a positive decision, thesocial worker will contact the concerned person. The SHGs check whether the applicantis a resident of the respective village and if the income is sufficiently low, since only BPLhouseholds are eligible to join. To confirm BPL status, SHG members are supposed tocheck the applicant’s ration card (see Box 4.2), but this is usually replaced by socialcontrol. By involving the SHGs, Karuna Trust makes use of the information availableamong the members; but as members are not bearing part of the risk, this mechanism isunlikely to create the desired effect.• Potential clients also approach the social workers in health facilities. In the lastsubscription period, about one third of the clients in T. Narsipur taluk joined at healthfacilities. A minority joined when they were admitted. As a social commitment, eventhese patients are immediately covered.• During the renewal period, many social workers go house-to-house to inform peopleabout the insurance. This mechanism is time consuming, but seems to be rather effective.• The programme coordinators serve as an additional distribution channels. In their dailywork, they inform people about insurance and prospective clients can approach them atthe field offices where they can become a member of the scheme.The distribution channels seem to be effective as Karuna Trust mainly builds on its existinginfrastructure. Using the same infrastructure has the advantage of leveraging the trust thatwas built up through other activities.The social workers at the health facilities are a particularly effective channel since theyapproach prospective clients (or are approached) when the client’s attention is focussed onhealth issues. They make use of the increased readiness of clients in these situations. Thevalue of the “right” situation when addressing a potential client is acknowledged in product25