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Microinsurance builds resilience after tsunami

By Kate Tighe
Devudamma Ummidi's first aid training has proven useful day to day, caring for pregnant women, sick children, and fishermen injured at sea. "They come to me for my help," she said, "and I feel very happy about that.

If Devudamma Ummidi's family were still uninsured, her son's high fever would have cost her a huge percentage of her yearly income, and indebted her to loan-sharks.

But now that she has insurance, she can afford to take him to a clinic to get checked out.

According to Devudamma, many mothers here face the same dilemma when their child comes down with fever. Fevers could mean malaria or dengue, both of which are potentially fatal.

"Because they don't know what it is, the tendency is to rush to the hospital," said Devudamma, "But they charge a lot."

"That's where insurance is very handy," she said.

Many fishing families in the Pudimedaka village are deep in debt, borrowing money to rebuild boats, to cover daily costs when the catch is small or injury or illness keep them from working, or, like Devudamma, to pay for medical care.

When fish are plentiful, families have to pay back their loans, usually with a high percentage of their catch.

But health insurance, as part of a broader economic plan, is opening up new possibilities here.

Three years ago, the District Fishermen's Youth Welfare Association (DFYWA) a local NGO, and Oxfam partner, helped families in this village determine that medical expenses were a huge drain on their resources, costing some up to a quarter of their yearly income.

DFYWA also convinced Oriental Insurance, a government of India company, to create policies designed, and priced, for very poor fishing families.

Now, for what they make in a day, families like Devudamma's, can purchase an annual policy, protecting themselves from the costs of sickness, accidents ? even the death of a breadwinner.

With money saved on medical care, families here are buying ice-boxes, fishing nets and fish drying and processing equipment. These investments can help them earn a little more on their catch than they did before.

Health insurance is a great first step, but ultimately, the people of Pudimedaka need a more comprehensive insurance package to keep them out of the pockets of money-lenders, who fulfill a "mafia-like" role, according to J. Saravanan, fisheries expert from the Development Human Action (DHAN) Academy in Madurai.

Beyond medical costs, fishing families would benefit from insurance that covers assets including their boats, houses and even their day's catch.

Initially, Oriental did not know how to insure the traditional Indian catamarans that the poorest fishermen use, since they had no way of knowing whether the boats were seaworthy.

But DFYWA convinced the Department of Fisheries to rate and certify even these homemade boats. As a result, boat insurance should be available soon, according to Oriental representative Srihari Naidu.

Home insurance has also proved tricky for Oriental, since thatched roofs break easily in storms, even though they are also cheap and easy to repair.

And Naidu was confounded by the idea of insuring a fisherman's catch, despite the fact that other insurers have found a way to insure a farmer's crops.

Fish are a common resource, used by many, said Naidu. "We can't possibly know how many fish are in the sea."

Insuring assets, and not just health, would do more to keep vulnerable families out of debt, and allow them to build their savings, add value to their work, earn more money and reduce their vulnerability.

Mahalakshmi Kara, a grandmother in the village, has relied on a health insurance policy for at least a year and has started saving a small percentage of her earnings.

"We never thought that we could save, but we're doing it," she said.

"I don't know how it will be helpful," said Kara, "but if [saving] can lift us even an inch out of poverty, I'll be very happy."