Economic Affairs
Year : 2009, Volume : 54, Issue : 3&4
First page : ( 142) Last page : ( 148)
Print ISSN : 0424-2513.

Micro Insurance in Disaster Management: A View

Sambasivam K., S.S. Lecturer and Research Supervisor, Raheem A. Abdul, S.G. Lecturer

Dept of Economics, The New College, Chennai-14.

Bharathidhasan Govt College for Women, Pondy-3.

Abstract

The social security network in India is patchy, with minimal risk coverage for most low-income groups. Bulk of the designed security packages like health insurance, superannuation benefits is restricted to those who are in the organised sector. Those sections of the society, who need the benefit the most, often do not have awareness or accessibility to them. In the absence of the state providing its support as part of its welfare measure the poor must fend for themselves. Insurance is one financial instrument amongst several that helps the poor manage their risks. Insurance was evolved as various stakeholders are now viewing an instrument for social improvement as a social security tool. While poverty alleviation programmes draw their strength from a comprehensive financial package, instruments like insurance supplement the objective by taking care of Unforeseen events. Persons who are covered with insurance will be benefited from the pool of insurance fund resourced from collections by way of premiums. Thus, a part of section who were unallected by risks are contributing to the relief of the affected section, while affected section could be receiving more than what they paid as a premium. This aspect when experienced further strengthens the concept of a co-operative endeavour for which insurance happens to be an edifice. From the concept of risk transfer and risk sharing, insurance can be effectively viewed as an integral part of disaster management. Therefore, this paper envisage that the role of Micro insurance in disaster management.

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