Microinsurance for Natural Disaster

India is a country that was relatively successful in the formation of a natural disaster microinsurance. Government willing to cover the premium for a while. Gradually the numbers reduced by including the active participation of the population to allow for sharing or contributing to the payment of premiums. Premium payment mode can be done daily, monthly, in cash, or with the crop.

Learning from the success story of Grameen Bank based on the active participation of society, with self-reliance, community seeks help themselves by forming groups to establish or participate microinsurance natural disasters. The main challenge of this approach is how to raise insurance awareness together, as part of risk management the future of life living in disaster-prone places.

As many as 84% of Indonesia is prone to natural disasters, from floods, landslides, earthquakes, tsunamis, hurricanes, volcanic eruptions, to forest fires. Severe impact of the disaster so far not been accompanied by the anticipation of risk management with a variety of losses, both property and lives. Currently there is no natural disaster microinsurance to protect population in disaster-prone zones.

Currently, many banking institutions distribute microcredit in rural areas, why not jump in insurance agencies in the establishment of microfinance microinsurance natural disasters in India or North Australia?

It may be less favorable, because in Indonesia, according to current statistics the percentage of insured people's participation in only 18% of the total population. The low percentage was partly due to unaffordable premiums, perceptions of the difficulty of taking care of insurance claims, and the still low awareness to manage the risk of future life.

Insurance premiums become major obstacles and finally insurance has not become urgent needs. Poverty is also a major constraint in the insurance program participation. Considering the constraints of limited purchasing power, the government should encourage micro-insurance program of natural disasters by creating a legal umbrella. In addition, encouraging large companies launched a program to corporate social responsibility (CSR) in the formation of a natural disaster microinsurance.


Government regulations concerning the establishment and implementation of disaster microinsurance programs, would also regulate the rights and obligations, both for the insured and the insurer, coverage of the disaster, the type of natural disaster, whether natural disaster or a disaster all in accordance with the characteristics of the situation of people living in areas disaster-prone.

Another model is to provide direct support micro-insurance premium natural disasters, particularly to population who live in disaster prone areas such as in a tsunami-prone coast, or areas of active volcanoes. Before the program launched, the government needs to map the vulnerability of disaster in the mountains, beaches, watersheds, and make the socio-cultural map of the population.