Efficiency of the government’s intervention in the development of the micro insurance industry: The Indian case

Abstract

In this paper I assess whether there is a positive association between the Indian Government intervention and the development of the micro insurance industry in the country. I explain what were the different actions undertaken by the local Government to improve the efficiency of the market, and describe the development of the micro insurance industry in India. This paper aims to shed light on the advantages of the intervention of the Government in a sector like micro insurance. It also shows how to make the Government’s intervention better, and especially what India can learn from other countries to continue improving the efficiency of the micro insurance industry. This study clearly shows that the Indian micro insurance market has experienced a huge growth during the past years. The Indian Government has definitely boosted the industry by giving a clear, consistent and efficient legal framework. However, there is still some improvements to do, and to get better, India can take example on other developing countries like Peru, Philippines or South Africa, where the Government’s intervention has also helped to develop the industry.