Micro insurance or micro agent was a channel in the insurance industry that was developed for deeper penetration of insurance into country with large low income group. However, with smaller ticket size coupled with low commissions, this channel has seen low participation from distributors.Micro-insurance products, which offer coverage to low income households is a mechanism to penetrate rural areas. It is a general or life insurance policy with a low sum assured and low premium size per policy.
The main reason behind few sellers of micro-insurance policies could be low commissions. Data from insurance company disclosures showed that a majority of insurers do not have any micro-agents. A handful of life and general insurers have such agents.
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