Micro Insurance Academy (MIA) is presently engaged in a GTZ commissioned study, entitled “Using Community Dynamics in Pro-poor Insurance: Affiliating Communities En Bloc”. The main objective of the study is to analyze and understand ‘successful’ collective action examples in diverse areas across India. Towards this, we are conducting six case studies on collective action. The aim is to understand the underlying processes of ‘community dynamics’ that drives ‘success’ in each case, and gather how these features can be incorporated while providing community micro-insurance.

Collective action can be broadly defined as engagements of people to organize themselves and mobilize resources to solve problems of common interest. There is scope and evidence of collective action in diverse areas like microcredit, water supply and watershed management, agricultural production and marketing, and notably, in natural resource management. Poor communities in a developing country like India often depend on common resources like forests, irrigation systems, and grazing pastures for livelihood purposes. Moreover, when services are inadequately provided by the government/ market (e.g. water supply and sanitation services, financial services like credit, savings and insurance), a whole community can get together in a collective action process and jointly see to its provisioning.

The research project wants to create insight on how to enable en-bloc affiliation of entire communities into micro-insurance. En-bloc affiliation promises many advantages for insurance, such as:
(i) Reduced admin and transaction costs (and hence lower loading on the premium);
(ii) Faster expansion of insurance;
(iii) Use of information that flows locally free of charge to improve the internal distribution of costs (encouraging an informal intra-village cross subsidy based on local information of wealth and of economically weaker members of the group.

However, there has been little success in achieving en-bloc enrolment in micro insurance so far. En-bloc enrolment of communities into insurance is a form of collective action. There are plenty of examples of successful collective action in domains other than insurance. The project intends to learn from successful collective action in various domains and to derive lessons for initiating collective action in micro insurance.

We will be taking successful collective action examples in domains like sanitation and drinking water supply, grain banks, watershed development, solar power, etc., apply both qualitative and quantitative research tools to study the processes through which collective action was introduced by external agencies and factors and conditions under which they met with success.