Welfare Insurance & CIS Region

5 May 2016 —
Although Welfare Insurance is a new term, it is requirement that needs to be addressed on a priority bases. Financial inclusion, mass health and mass accident policies, mass/ group life insurance policies, agriculture & cattle insurance, etc. are common in insurance industry. To understand the term, I have defined Welfare Insurance in my book as "a Government program designed with an indented outcome of financial wellbeing of individual and society as a whole, during the time of loss of life, other bodily injury or loss to property". Involvement of government is very important, key aspect of Welfare Insurance concept.

Food and Agriculture organization of United Nation have stated on their website that "Agricultural insurance, including livestock, fisheries and forestry, is especially geared to covering losses from adverse weather and similar events beyond the control of farmers". Similarly, UN has a separate department to focus on Health and Life insurance, that gives us an idea how much it is important to use insurance as a tool of social security.

Coming to the CIS region, there is a long history to show for Russian Federation and other CIS countries, but to make a long story short, there is not much difference when it comes to social problems and penetration of insurance. Why these statistics are important, and the issues of poverty, illiteracy, inequality of income, drugs, issues related to women and girl child, etc. are the concern areas that are explained in my book "Welfare Insurance", hence it is advised to the readers to have a look at detailed explanation in my book "Welfare Insurance" & "Introduction to Welfare Insurance" that is a kindle edition. Together in CIS countries few statistics show that the situation is alarming.

While making an argument that Welfare Insurance is imperative for us to look at, what is the current situation that can be tackled with Welfare Insurance. Looking at people living below poverty line, in Russian federation,

- An average of 19.2 million Russians, a 13.4% of the population lived last year on less than 9,452 rubles a month. This is a 20% increase year on year, with an average 16.1 million people living below the poverty threshold in 2014. As quoted by TheGuardian. Source

- Unemployment rate in Russia was recorded at 6.0 percent in March of 2016, up from 5.8 percent in the previous three months and above market expectations of 5.9 percent. Source

- Infant mortality rate is 6.9% as per 2015. Source

- The agriculture industry in Russia is largest employment providing industry that accommodates more than 16% of countries population. It brings around 6% of the total national GDP. Source

- Wikipedia says "Health in Russia deteriorated rapidly, particularly for men as a result of social, economic, and lifestyle changes.

- As quoted by The Globalist
  • Russia is experiencing a rapidly aging population with steadily declining birth rates.
  • Serious health problems among Russians derive from high rates of smoking and alcohol consumption. Mortality among Russian men rose by 60% since 1991.
  • Estimates of annual fatalities derived from smoking-related diseases range from 350,000 to 400,000.
  • More than two million Russian men are considered to be HIV positive. 80% of those infected with HIV are under 30.
- According to the World Health Organization, heart disease, aggravated by alcohol and tobacco, is responsible for over 1.2 million deaths each year.

- In 2012, 29,735 of 1,906,335 (1.56%) deaths in Russia suicides. In 2012, the rate of teenage suicides in Russia was three times higher than the world average. as per Wikipedia

- It is estimated that 330,000 to 400,000 people die in Russia each year due to smoking-related diseases

Going back to CIS countries,

- Armenia: - Poverty rate is 32.4%, Unemployment is 19.6% as of end of 2015. Some other challenges in the country are high unemployment, child labor, organized crime, political corruption, education, human trafficking, domestic violence, and inadequate public services.

- Azerbaijan: - Unemployment rate is 5.4% and infant mortality is 38.5% as per UNDP figures.

- Belarus: - Charger91 in 2012 quoted, "About 55% of Belarusian families are estimated by independent experts to live on the verge of poverty today."

- Kazakhstan: - with total population of 17.29 million, it is hitting 2.9% of the population living below poverty line as per world bank. According to Kazakhstan Healthcare Ministry, in January-September 2012 infant mortality rate made 13.9 percent per every 1,000 live-born children and maternal mortality rate was 14.3 percent per 100,000 of live-born children.

- Kyrgyzstan: - With total population of 5.836 million, poverty headcount is 30.6% as per world bank

- Moldova: - Total population is 3.556 million with poverty of 11.4% as per world bank figures

- Tajikistan: - Population is 8.292 million with 32% people under poverty line. High infant mortality rate is another factor.

- Uzbekistan: - 16% of the total population of 30.76 million lives under poverty line as per world bank.

Other common issues that can bring attention in CIS countries are Human Rights, immigration, poor economy, human trafficking, socio-economic etc. The figures above show us that government need to address the areas that express serious concern. Use of insurance as a tool to tackle this issues, is imperative.

We can write in details about each country, however a common factor is a struggling economy, infant mortality, health standards, life expectancy rates. Health insurance, personal insurance, agriculture insurance, etc. have been taken care at some extend, however average age of people in these countries is reaching to record high. Countries that has young working population today, is going to retire after 30 years. Pension schemes, health insurance for major diseases for people above 60 years of age is a key aspect that needs to be addressed by various governments in CIS region. Insurance should be used as tool for providing these social security measures for population that is growing old. For designing a pension schemes, this is the time when schemes have to be designed and implemented. Insurance has been a business, however with this perspective of providing social security to society as whole, Government, NGOs, insurance sector, and other agencies have to accept the concept of "Welfare Insurance" and work collectively in an organized manner.

An Example of "Welfare Insurance" would be, RSBY Scheme of Government of India that covered 36 million families in India (family of 5 members). This is the largest health insurance scheme across world. Looking at the success of the scheme it has been adopted by many other countries.

Penetration of insurance is very low among all of these CIS countries. Government funded, designed insurance schemes would be a key tool for increasing insurance penetration in any country.

In next few articles, we would analyses how and why "Welfare Insurance" is important to each country one by one. We would also examine each product of "Welfare Insurance" that would help policymakers to understand and think in a direction to start designing Welfare Insurance schemes.

by Hitesh KHRISTY

Hitesh KHRISTY is a Development, Project Management and Reinsurance Professional, having worked in multiple countries. He has been writing for NGOs, IT Companies, insurance sector and on social issues, political empowerment, United Nation and it's concerns, war and peace, for more than one decades. Has been involved in speaking at Social work and Social science schools & various universities on Welfare Insurance, Micro Insurance, War & Terrorism, Social issues. Few of his upcoming books are on 1) Modern Social Problems, 2) Liability Insurance,  3) Terrorism etc. 

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