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Box 5.2 VimoSEWA: Synergies between health insurance, health care,
and health education
The health service provided by SEWA to members is a particularly important resource for
VimoSEWA’s health insurance. SEWA Health has worked to improve the skills of midwives and
health workers, which has had a direct impact on reducing maternal and infant mortality. In
some districts, a pharmacy service provides low-cost, generic drugs to members. Attempting
health insurance without knowledge of diseases, health facilities and risk mitigation strategies
will likely doom a scheme to failure. VimoSEWA has benefited from the experience of SEWA
Health by better detecting fraud by members and providers, directing members away from
inappropriate and expensive treatments, and by providing health promotion activities and
information to insured members.
Excerpted from Garand 2005
Box 5.3 Lessons from the insurance experience of ASA,
Spandana and SHEPHERD
Lessons: Mission, Vision and Outcomes
• MFIs cannot provide all services; and clients cannot afford to buy numerous insurance
products. The challenge for the MFI and its clients is to figure out the most cost-effective
solutions to their clients' primary problems.
• These cases demonstrate that the MFIs' mission and vision significantly influenced which
products were selected and how they chose to sell and service them.
• There appears to be a trade-off between reaching many people with a simple (mandatory)
product and reaching fewer people with more complex, varied, and voluntary insurance.
• MFIs should examine who is likely to receive a life insurance benefit. By ensuring that
children, especially girls, can receive the benefit, the product could be more attractive
to women.
• For women to really benefit from life insurance, the coverage should be on the lives of
their husbands. As the cases will show, however, this is easier said than done because of
adverse selection problems that can emerge when coverage was extended to husbands
without screening or age restrictions.
• While an MFI might undertake prevention strategies to fulfill its social mission, these
interventions could have the additional advantage of reducing claims.
• It makes sense for MFIs to start with a simple life policy to learn about insurance. However,
once MFIs know how to manage insurance risks, then it makes sense for them to move on
and provide coverage that better meets clients' needs.
Lessons: Delivery Mechanisms
• There are many problems with the partner-agent model, but they can be fixed.
• In India, where insurers are legally compelled to sell insurance to low-income clients, it is
difficult to see the advantages of an MFI selling insurance in-house.
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