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The Rise of Micro insurance

by John Hui | March 8, 2013 at 6:08 pm

Around the world, approximately three billion people survive on less then $2 a day. Many are trapped in a cycle of poverty that impairs their health, relationships and social mobility. When financial disaster strikes, such as the death of a breadwinner or costly health issues, the majority have no means of getting by. It is a disheartening phenomenon, that those whose lives are most fragile are the ones without access to a safety net. Enter microinsurance. Microinsurance is a segment of insurance products designed with smaller premiums and less coverage to support low-income populations that cannot afford or do not have access to traditional plans. As an example, premiums for a microinsurance plan in India can be as low as 45 rupees a month (3.8 cents per day) and cover losses around 2,500 rupees ($62.75 dollars).

The number of people insured by microinsurance has increased from 78 million in 2007 to 500 million today, according to a study published by the International Labor Organization and the Munich Re Foundation. The total value of the microinsurance market now exceeds $40 billion, according to reinsurer Swiss Re, and Lloyd’s of London projects that the market has the potential to someday provide up to three billion policies. There have been many factors contributing to the growth of microinsurance in the past five years. Urbanization and economic growth in countries with large, lowincome populations has increased the purchasing power of this market segment. The two leading microinsurance countries are China and India, which account for nearly 80% of the worldwide market, followed by Latin America, at 15%, and Africa, at 5%. The estimated purchasing power of China’s poorest is $161 billion and India’s is estimated at $93 billion, according to Accenture. As the purchasing power of these densely populated, low-income areas continues to increase, so too does the need to insure that income.

High costs are the top challenge facing insurance companies when issuing microinsurance, according to “Commercial Insurers in Microinsurance,” a survey of insurers conducted by the Microinsurance Network. (click for larger graph)

Another factor driving the rise of microinsurance is government involvement. The Chinese government first started using microinsurance in August 2008 in rural areas where 400 million people, among a population of approximately 700 million, may be able to benefit from microinsurance. The government has offered incentives for large, state-owned firms, such as People’s Insurance Company of China, as well as small, privately owned insurance companies.

seven of the 50 largest insurance companies targeted this low-income group. from 60 million today to close to one billion in 2015. Three organizations. which include organizations that work in the world’s biggest cities and smallest villages. three-quarters of the world now has better access to mobile banking than to clean water and electricity. Unbelievably.The increase of private-firm involvement and partnerships between public and private groups has also helped attract attention. The number of mobile phone users in the developing world now surpasses the number of users in the developed world. so too will its citizens’ access to microinsurance. a factor that was cited as the largest benefit for insurers that offer microinsurance. Even with the sector’s recent expansion. If the weather worsens. As technology use continues to evolve throughout the developing world. A text message is then sent to the farmer to confirm the policy. In 2005. Private insurance companies have formed partnerships with local microfinance institutions. mobile networks. which reduces transaction costs drastically. microinsurance has experienced a variety of challenges. according to a report by the World Bank. These companies have seen the enormous potential for growth in the industry and have been eager to increase their market size. A microinsurance policy can be registered by using a camera phone to scan the barcode on each bag of seed sold. and the number of people using mobile banking in developing nations is expected to explode. according to a survey conducted by the Microinsurance Network. health service providers and NGOs. namely the widespread use of mobile phones. Another cause for the expansion is the rise in technology. 33 out of 50 are involved. If the crops are. allows these financial products to be distributed to a much more geographically diverse consumer base than ever before. analysts use a system to calculate if the crops would be damaged. which is distributed by the Kenyan branch of UAP Insurance in partnership with the Syngenta Foundation for Sustainable Agriculture and Kenya’s largest mobile company. The concept of insurance is completely new to many low-income . Safaricom. agents. have joined together to create a system that allows Kenyan farmers to insure crops through a mobile phone. A microinsurance policy. Today. can be registered by using a camera phone to scan the barcode on each bag of seed sold. This system eliminates all other intermediaries and paperwork. The infrastructure created by these partnerships. a payout is made directly to the farmer through his phone using Safaricom’s mobile banking service. governments. for example.

many of whom are illiterate. many initiatives have arisen that highlight the promise. LeapFrog. successful track record. overcoming geographical and cultural barriers. microinsurance continues to be a promising tool in the war against poverty. Although challenges exist.populations.P. and its high-profile investors. This is a foreign concept to many populations in the developing world. Microinsurance programs need to be able to provide sustainable revenue models that can access fluid distribution channels. however. mutual trust is created. there is a larger hurdle in trying to introduce it to populations unfamiliar with the underlying principles. but also an opportunity to invest for the future with increased security. including farmers and migrant laborers. such as the Clinton Global Initiative and J. the revenue model needs to be selfsustaining with a large pool of policyholders. now and in the future. the world’s first and largest microinsurance investment fund. With an growing. . Morgan. In order for microinsurance to scale in an area. Considering that insurance can be a tough sell even in the United States. however this is reversed when a consumer purchases insurance. Providing insurance for the poor not only gives the economically disadvantaged a fallback plan. The client needs to trust that the agency will repay him or her in case of disaster. When a microfinance institution provides a loan to a borrower. It may be more likely that a microinsurance package will be purchased when coupled with a microloan because. in this situation. continue to bring attention to the business. for microinsurance. A large number of small policies leads to higher transaction costs. it is entrusting that the borrower will repay his installments.

to increase their production and escape from poverty. This situation. Dutch remote sensing company EARS has developed a 30 year climatic database on the basis of Meteosat. is rapidly changing. . EARS Weather index insurance is considered an important risk-sharing mechanism to assist farmers in resisting the vagaries of climate. Using its relative evapotranspiration(RE) drought index. which covers the entire African continent. EARS is successfully cooperating with a range of partners and developing drought and excessive precipitation insurance across the African continent. But the introduction of index insurance is hampered by lack of data. however.FESA Micro-insurance: Satellite Indices Breakthrough Andries Rosema.

Introduction FARMD (March 2012) | Farmers can raise their production and income considerably by applying improved tillage techniques. For this purpose most farmers need a loan. in particular drought. Because of climatic disaster. fertilizer and pesticides. There are millions of smallholders with only a few acres of land and a production of say 1-2 tons of millet or maize annually. financial institutions are reluctant to offer credit. Thus micro-insurance must be low cost. Micro-insurance is the solution. However. (Figure 1: Meteosat relative evapotranspiration (RE) used for drought insurance) . better seeds. At the same time the index should closely represent the reduced crop production due to drought. The loan to be insured may be in the order of $200 and the insurance premium some $20. famers may lose their crop and would not be able to pay back the loan.

this index is not yet well known.In the past. crop yield forecasting and river flow forecasting. both in terms of co-location of the data and representativeness for crop growth. Doorenbos and Kassam 1979). Therefore. The index was approved and priced by Swiss Re. EARS monitored the index and each 10 . It is also possible that rainwater is stored in the soil for considerable time and used by the crop with months of delay. Thus FESA based insurance can truly reach every farmer. radiation. EARS is a product of this school. In Africa. however. A considerable part may run-off or may percolate into the subsoil. EARS is producing regional crop yield forecasts for Europe and Africa. In the framework of this project a 30 year retrospective data base of Meteosat hourly visual and thermal infrared data has been compiled and has been processed to daily and 10-daily climatic data fields. 2010). there are few rainfall stations. The methodology has been reported and extensive validation of the climatic data has taken place(Rosema et al. evapotranspiration and precipitation from space. Mongolia and Niger. 30 year data series can be extracted for any location on the African continent. Climate data from space After the declassification of remote sensing at the end of the 1990’s. FESA is not using precipitation for drought insurance. as a Netherlands contribution to the UN Millennium goals. The corresponding pilot project was carried during the 2011 growing season. Systems and services are provided for satellite based drought monitoring. Moreover. The project is carried out in cooperation with micro-insurance broker Planet Guarantee. Indemnification of farmers would then take place if precipitation during the growing season would not meet certain predefined levels. Maize insurance pilot and scaling up In early 2010 EARS completed it first drought insurance design for Maize growers in Burkina Faso and Mali. Since evapotranspiration is hardly measured on the ground. A very dense and costly network would be required to adequately represent the spatial variability. The objective is to develop satellite based micro-insurance that reaches every farmer in Africa. RE is proportional to crop yield (Stewart 1973. a Dutch remote sensing school developed. Another limitation is that rainfall is not a good measure of actual crop water use. adding rain gauges would not provide for a long precipitation history that is required to assess the drought risk and to price the policy. using rainfall data for micro-insurance involves considerable basis risk. but the relative evapotranspiration (RE). The RE data developed in the FESA project covers the entire African continent at 3 km resolution. In 2009 the company received a grant from the Minister of Development Cooperation to carry out the FESA Micro-insurance project. specializing in the physical description and mathematical modeling of “object-sensor interaction”. But it is the best possible agricultural drought indicator. The company is using visual and thermal infrared satellite data in mapping temperature. drought insurance has been based on precipitation. Operational systems have been or are being implemented in China (4x).

some locations had a very timely start of the season. It was shown that the RE index reflected well the overall water availability. . Figure 2: RE 30 year data series at Dande. The CCD is measure of the dwelling time of Cumulonimbus clouds (rainstorms). In cooperation with Syngenta Foundation a new challenge was met. the FESA project also entered a new path: excessive precipitation insurance was developed. In the foothills of the Aberdare range farmers grow French beans using water flowing from the mountains. During this pilot a remarkable event took place. based on Meteosat derived cold cloud duration (CCD). while others. with some phase shift. Burkina Faso Expanding activities Cooperation with micro-insurance brokers is also expanding. Variations in RE were. Partnerships are developing with Syngenta Foundation. It is a good proxy of precipitation. MicroEnsure. FSD-Kenya. Both the drought and the excessive precipitation insurance were approved and priced by re-insurer Swiss Re.days a data report was provided with information on the start and progress of the season and the temporal development of the index. correlated to production. In this area. not far away. covering farmers in large parts of Burkina Faso. were 40 to 50 days later. Cardano and RMS. Based on this successful first pilot this insurance initiative is now being scaled up to more than 800 locations. This analysis was confirmed by rain gauges that for the purpose of validation had been placed on the ground. Mali and Benin. Due to fragmented rainfall.

This concerns mechanized agriculture with property sizes of tenths to hundreds of hectare. EARS was requested to develop an RE based drought insurance structure. RMS. . Also in Kenya. the Netherlands. and Hagan R M (1973) “Functions to predict effects of crop water deficits”. Geostationary meteorological satellites serve a large meteorological community and belong to the most reliable and stable satellites in the world. FAO Irrigation and Drainage Paper 33. Publication EARS Earth Environment Monitoring BV. from Newark. in particular to eastern Asia. In cooperation with risk manager Cardano from Rotterdam. Rosema A. Outlook FESA micro-insurance is growing fast. Irrigation and Drainage Division 99. Ministry of Foreign Affairs. References Stewart J L. Current FESA activities also tend to extend further southward on the continent. affordable micro-insurance. is studying the use of the RE index data for large scale maize insurance in Mozambique. pp 193. FAO Rome. As a spin-off. drought insurance for rice growers in Madagascar is explored. validation. After due introduction in Africa. DeWeirdt M. contract design”. p. 421-430. Therefore reception of the data is assured. Doorenbos J and Kassam A H (1979) “Yield Response to Water”. MicroEnsure also requested EARS to develop drought insurance for maize and rice growers in Rwanda. A most profound design process took place with the objective to properly reproduce the drought events as witnessed by local farmers in recent years. pp 95. the technology may also be extended to other parts of the world. Since December 2011 the pilot is running and the RE index is monitored. The pilot is to start soon. after many years of development. Wilczok C (2010) “FESA Micro-insurance: methodology. California. It is expected that millions of African farmers may be insured in about 5 years. DG International Cooperation. The final RE based insurance structure did well reproduce the crop losses in recent drought years. EARS joined FSD-Kenya and World Bank ARMT to develop drought insurance for wheat growers in the district Narok. the Netherlands. MicroEnsure regional managers were trained in understanding the RE-index. We are proud that.Partner MicroEnsure is carrying out drought insurance activities for the Tanzania Cotton Board. A second cotton insurance project has started in Kenya with Planet Guarantee. For Meteoat there is a permanent backup satellite in orbit. where Japanese and Chinese geostationary meteorological satellites can provide 20-25 years of data. this innovative satellite remote sensing technology can play an enabling role in the development of large scale. Consequently there is a stable basis for further deploying the FESA micro-insurance technology. Foppes S. Milennium project no 38. An inventory of existing rainfall data in the Bunda district showed these to be insufficient in quantity and quality. Delft. ASCE J.

seeking viable ways of overcoming them on the back of groundbreaking initiatives and developments. Churchill’s Janus model. low premium and low coverage limits but microinsurance also involves other complex and less familiar aspects deriving from its target segment. which is the best known among students of microinsurance: .. calling into question the economic viability of the projects involved.MICRO INSURANCE and its singular feature Microinsurance has burst onto the insurance scene as a groundbreaking product. This will open up a potential market of 4 billion people and 5 billion dollars of annual income.e. FRANCISCO JAVIER GARAYOA ARRUTI DEA Insurance Sciences . which is the original approach and is tied in with CSR programmes. i. Both approaches aim at the same objective. allowing these operators to meet their social responsibility programmes while also fulfilling their strategic business plans. These complexities hinder the implementation of traditional insurance criteria not only in terms of risk aspects but also strictly operational factors. identified as the segment occupying the base of the wealth pyramid. which is none other than alleviating the vulnerability of the poorest. The various international operators and bodies working on the development of microinsurance are currently striving above all to identify and address these limitations and barriers. Its hallmark features are its social function. and secondly the challenge of coming up with a commercial insurance solution for low income markets. This twofold approach is represented graphically by C.Universidad Pontificia de Salamanca WHAT IS THE MEANING OF MICROINSURANCE? This question brings us up at once against the classic twofold nature of microinsurance. low income groups. firstly its function of social protection.

or animal-farming work or small companies. such as regularly paid premiums. the characteristic trait of microinsurance is assistance for the low income segment but incorporating the basic principles of the traditional insurance activity. however. the uncertainty of the risks and the proportionality of the premiums to the risks and costs. The two faces of microinsurance. Microinsurance changes its spots completely depending on which side we approach it from. In practice. as in the former dichotomy. Churchill 2006. limiting implementation of the principles of the traditional insurance activity. subsidised in its social approach or self-sustainable in its commercial vision. As our starting point we are going to take one of the most complete and widely accepted definitions of microinsurance put forward by the World Bank’s Consultative Group to Assist the Poor. This claim is borne out by the key determining factor. (C. As our study of microinsurance deepens we soon see that some aspects of this definition are difficult to apply in the low income segment. both strands tend to come together in terms of protecting the poorest groups from the risks they are exposed to. Reality. which is often hardly compatible with the principle of proportionality between the premiums and risk covered or with the passing . CGAP . which defines microinsurance as «A financial arrangement to protect low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved». which could be «protective». Churchill 2006) According to this definition. . and also could be viewed as «productive». the necessary «affordability» of the premiums for the members of the low income segment. in the strict sense. Another theoretical dichotomy is posed by the function of microinsurance. embracing personal and family protection. resists being boiled down to neat theories so general analysis works from the social aspects towards market approaches to bring both strands together.Figure 1. As we have already pointed out. this difficulty impinges on the product and the activity itself. on the basis of support for investment in economic activities with capital-based microinsurance tied in with crop. with health and life products.Source: C.

– The microinsurance challenge. redesigning the typical products. shown graphically in the figure below. demand and delivery channels. It is not just a question of low premium. Figure 2. streamlining internal processes and. in short. low coverage insurance but is in fact hemmed in by barriers that are difficult to surmount for traditional operators who wish to move into the microinsurance market. This is no easy task as we will see later on. premium affordability and operating costs. dealt with by C. As we see from figure 2. bringing them into line with the target market. the right balance needs to be struck between coverage. Churchill and Denis Garand as part of the strategies of sustainability (C. . Churchill. Along these lines we are going to look at some breakthroughs achieved in terms of the product. Churchill 2006).). Innovation is essential. (C Churchill 2006). As we see the complexity of microinsurance soon raises its head. rethinking delivery channels. D. the complexity and cost of setting up new delivery channels and the costs deriving from smaller coverage units. among others. One vision of the economic challenges to be taken on is reflected in the so called «Microinsurance Challenge». & Garand. C. finally considering some examples of the adaptation measures.on of the operating costs (It should be borne in mind here that the claims ratio and costs will be higher than those of other segments given the special vulnerability of the people involved. To strike this balance between economic sustainability and affordability we cannot fall back on the traditional insurance set-ups. Source: «Strategies for Sustainability».

The insurance provider is not positively viewed and little sense is seen in the tradeoff of paying premiums against an uncertain future event. leads to situations in which there is no clear demand. accessing and responding to the demand. especially in terms of insurance. thus building up a favourable climate for the microinsurance activity. One positive trait of microinsurance. with the corresponding time and economic cost. albeit normally on a family basis. seldom understanding the advantages of the product. Problems in the technical specifications of the product: To be able to weigh up properly the future risk assumed and allow actuaries to establish the corresponding criteria and quantifications we need first to look at the characteristics of the group involved. The lack of any financial culture. from the cost and affordability viewpoint. standing in need of help and advice. 2. feeding in the necessary knowledge. The above appreciations give us a good idea of the sheer complexity of determining the product’s technical specifications. As an added complication we have to bear in mind that the poorest segment is characterised by high claims volatility. . is the group contracting nature of this arrangement. It should be pointed out here that this population segment often looks askance at the insurance activity. The problem is exacerbated if we factor in the complex technology that is hard to understand for a population with a high degree of illiteracy. which can often only be vaguely defined. greater exposure to risk covariance and the irregular and informal economic base of the insureds.1. It is essential to set up an insurance culture. Difficulties in identifying the demand: Problems are also raised in terms of identifying. of the claims ratio and other aspects. We therefore need to turn to groundbreaking and imaginative formulae that provide real solutions. This saves costs and introduces an acrossthe-board premium for everyone with the same coverage. In many cases there is no tried and trusted information on these aspects and this is in fact the first problem we come up against.

The Delivery Channels: It is essential to set up functional delivery channels. b. 3. operational feasibility and proximity to the segment. Limitation of benefits: Here there might be different variants. 4. 3. health service coverage limits. such as the partner-agent model. Optimum delivery modelsDelivery models involving no added cost should be set up. to find out their needs and offer products meeting these needs and their priorities. (E. such as the deduction of saving interest in microfinance institutions.g. A suitable level of efficiency to ensure that the whole process can be carried out properly. it is important to conduct prevention campaigns that avoid the risks or lessen the likelihood of their occurring. among others. such as limiting the supply to credit life insurance. annual compensation caps. Operational efficiency approach: Here we are referring to those aspects that involve a minimum contracting or administrative cost. the HIV/AIDS prevention campaigns) Another cost cutting possibility is negotiation with end service suppliers. we can cite examples of some cost-cutting measures: 1.. the affordable premium is a result of striking the right balance between risk allocation and costs. 2. the communitybased model or agreements with major service companies In addition to the above and in the interests of avoiding claims costs. Examples of adjustment measures: Getting down to the operational brass tacks.From the demand point of view group contracting means that these groups have to be identified beforehand. from the point of view of costs. to establish tariffs in line with the services. regardless of the model followed:    a. This entails meeting certain basic characteristics. In conclusion. c. Physical proximity to the low income segment. such as groups automatically covered for belonging to public or private bodies such as trade unions or cooperatives and those that use low cost revenue collection methods. the typical case of health insurance. The trust that has to be built up in said segments. This is the key to access to the .

etc. fleet-footed and efficient operations and processes for transformation from informal to formal activity.Garayoa 2009) . The legal framework has to take in the singular needs for driving this activity. emphasising the fundamental role of the regulator and the various operators.microinsurance market. HOW DOES MICROINSURANCE ACTUALLY WORK IN PRACTICE? WHAT ARE ITS IMPLICATIONS? When we get down to an analysis of the actual microinsurance activity we soon find that the traditional insurance premises no longer fit. Furthermore. considering such aspects as: the activity licences of the microinsurance institutions. vetted by the supervisory body.. The graph below shows the process for transforming the informal model into a formal model. Brazil. with the support and initiative of the formal operators. The scenario we are faced with is not very promising. understood as an activity geared towards selfsustainability. Many of the operators are unregulated and controlled by no supervisor.. with all the concomitant insecurity for clients and the very continuity of the activity itself. (Witness the initiatives implemented in many measures by the regulators of India. the typical and atypical delivery channels. especially the bigger insurance companies. simplified contract models. promoting those aspects that are most conducive to the development of the system in light of the particular situation in each national market. We are dealing here with a market based mainly on informal operators under no regulation or supervision. (J.). Peru. The work of national regulators is essential in addressing this situation and setting up a stable and enduring microinsurance market. and few tried and tested figures are to hand on such basic aspects as the claims ratio. we are working here with criteria of solidarity rather than proportionality and with minimum exclusions and across-the-board premiums in group contracting arrangements.

Figure 3. without forgetting the role of the formal operators in terms of knitting the whole thing together. . taking into account the idiosyncrasies of this sector. This figure shows how the integration process is kicked off by the microinsurance legislation laid down by the regulator. Drawn up by the author.Regulator’s planning stages. This whole plan needs to be vetted and controlled by the supervisor as part of its general control remit.. setting up incentives to offset the difficulties of the process. This incorporates a transformation plan to suit the market involved. Figure 4 shows the inputs of both the formal and informal operators and also the regulator’s role.

Hence the importance of support from the international organisations and the great multinationals of the insurance sector. drawn up by the author.and long-term business strategies that make these options affordable for emerging markets with high growth rates in terms of both volumes and margins. Groundbreaking innovations are also needed in the delivery channels and low cost technological models. Above all there is a need for medium. It is essential to reach a critical mass and build up a level of knowledge and experience to underpin the corresponding actuarial bases and risk criteria and phase in the rest of the conventional insurance principles. In view of the situation sketched out above. . it seems that any serious approach by the formal insurance sector to the microinsurance market would call for a complete change of mindset. It is essential to find feasible alternatives that strike the right balance between «affordability and sustainability» and «the informal and formal market».Figure 4: Source. based on the law of large numbers. It should be pointed out here that economic sustainability would at first depend necessarily on possible partial subsidies. establishing viable risk control and evaluation methods and agreeing to «waive» the mean yields of traditional insurance activity in the interests of social responsibility.

) Figure 5. The wealth pyramid below gives some idea of the market potential. Is it worthwhile from the social and business point of view to hurdle the microinsurance barriers? The answer will come from an analysis of the figures we furnish below. 2005).The whole development process referred to above calls for time and this needs to be taken on board by any organisation of the insurance sector that wishes to move into the microinsurance market. and without taking into account the lowest extreme-poverty stratum. IS MICROINSURANCE FEASIBLE FROM THE SOCIAL AND BUSINESS POINT OF VIEW? This question in turn begs another two: 1. What is at stake when we are deciding whether or not to move into microinsurance? 2. dependent on state aid. Analysing the market structure shown in the above graph.Wealth Pyramid. Source: Drawn up from figures of the United Nations World Development Report 2005. which cost out the social commitment of improving the situation of low income segments and making them less vulnerable while also showing the business potential of this market and strategic approaches for breaking into the market in the short and medium term. . we are going to focus on the potential market with minimum payment capacities. (WB. a sine qua non of self-sustainability. (The incomes are calculated as dollar equivalents..

(We should not forget the figure of 5 billion dollars of annual income. As regards quantifying the potential market.5% in Asia and 6.8% in Latin America. The insurance level of the population in the base of the pyramid is 1. products and delivery channels and even changing their institutional culture to bring it into line with a new business vision towards the low income segment (in this cultural change the social aspects coexist with traditional business aspects). . since we have deducted the indigent stratum from the total figure of 4 billion in the low income segments.3% in Africa.Source: Drawn up from the data of Figure 3. which will be dealt with in their own right. 2. there is no doubt that an attractive new market is opening up for national insurance companies and the major insurance multinationals. (Adapted from Microcare). the number of people involved and the income they generate. 2. (Martínez J 2007) On the basis of these figures. many traditional insurance companies have reacted by starting up research projects on how best to adapt their traditional models. and after publication of the book The Fortune at The Bottom of the Pyramid (Prahalad 2004). in terms of the breadth of the business.) Figure 6. Latin America weighs in with 10%. we can put a figure on it of three billion people.The indigent or extreme-poverty stratum would fit only in social or mixed microinsurance schemes focussing mainly on healthcare. Despite the abovementioned difficulties. There follow some significant figures on the emerging market: 1.. 50% of the base of the population pyramid live in China and India.

Certain geographical and social characteristics mark it off from the traditional insurance market while it also holds other elements in common. This nutshell analysis shows that the development of the microinsurance market is now well underway. this foundation takes an active part in the study and promotion of microinsurance.STEP Strategies and Tools against Social Exclusion and Poverty: This is an international programme set up by the ILO’s Social Security Department for carrying out field work and broadcasting the results by means of the online service. analysing the new models towards which the regulation of the microinsurance subsector has to be adapted to create a climate favourable to the development of this industry (depending on the regulatory policy of each country. one-off operators and donors in microinsurance matters. Peru. 5. Witness. such as identifying social needs to be . one of the first microinsurance agents on a worldwide scale. which began its activities in 2003. the telling cases of India. development organisations and other microinsurance stakeholders. one of its most important remits being organisation of the annual International Microinsurance Conference. 2. agents. with different market responses). involving the participation of researchers. insurers and other interested collaborators. there are regulators more or less interventionist in microinsurance matters.The Microinsurance Center: Created in 2000 from an initiative of Microsave-Africa.Microinsurance Network: Before 2008 formerly called the Microinsurance Working Group of the Consultative Group to Assist the Poor.Likewise the regulators and supervisors of many of the developing countries have proactively supported the birth of a microinsurance industry. donors. Colombia and the process underway in Brazil. GIMI.The Munich RE Foundation: Established in 2005.Insurance. CGAP. with economic inputs from the Bill and Melinda Gates Foundation. 4.Microinsurance Innovation Facility: This was created in 2008 within the ILO. Another important contribution along these lines has been made by the International Association of Insurance Supervisors. IAIS. It is this organisation’s definition of microinsurance that we have been working with. Global Information on Micro. among others. offering microinsurance training and bringing experiences to wider notice. its stakeholders include the World Bank and 60 donors. 3. The most important are: 1. At this point it is well worthwhile mentioning the work carried out by the international organisations.

org/ev_debug. Martínez. ILO in association with Munich Re Foundation 80791 Munich. (2009). J.munichre-foundation.McCord. McCord. in a public document of April 2007. (Ed 2006). (Un modelo de transformación)». WI54914. «Microseguros o seguros populares: Oportunidades de negocio que reduce la pobreza».25-11-2009).. Document available at www.worldbank. Jim Roth. International Labour Office.microinsurance. Direct access: http://www. PDF. «Los microseguros como mecanismo de lucha frente a la pobreza: presente y futuro.M.Lynndale Dr. González. «Protecting the Poor. Michael J.. World Development Report 2005. J. www. Panorama of microinsurance. 1045 N.microlinks. edition . Revista FASECOLDA. Germany. 2007. Switzerland. Edited by Craig Churchill. ( Ed 2007). «The Landscape of Microinsurance in the World’s 100 Poorest Countries».org www. (Ed 2007). WEB PAGES: http://www. At the moment this population is hardly able to afford the minimum wherewithal for creating and preserving wealth and ensuring dignified living conditions.met and a demand for specific risk management products to be satisfied. C. J... Centro de Documentación FUNDACIÓN MAPFRE. (2005). A. for a highly representative segment of the world population. http://www. Microinsurance Centre.microinsurancefocus.worldbank. BIBLIOGRAPHY World Bank. and Dominic Liber. Contact: Michael J.fasecolda. A Microinsurance compendium». CH -1211 Geneva. Ste 2E Appleton. Carrera 7 nº 26-20 Bogotá.p hp?ID=19163_201&ID2=DO_TOPIC (Cons.ilo.

the Microinsurance Network:    Distils and disseminates lessons learnt to promote client-driven and good-value insurance. discussion groups and task forces to allow in-depth work on specific topics and issues. The Microinsurance Network works with a broad range of stakeholders and maintains in all its activities low-income at its centre. prioritising work and actions that meet clients’ needs and protects their interests and well-being. facilitating knowledge generation and dissemination. Contributes to the development of good practices for the industry. .Mission Statement The Microinsurance Network's vision is for a world where people of all income levels are more resilient and less vulnerable to daily and catastrophic risks through improved access to effective risk management tools. Alexia Latortue from CGAP is the vice chair and Michael McCord from the MicroInsurance Centre is treasurer. The chair has been held by Craig Churchill from the ILO since 2002. In support of its mission. The Microinsurance Network is organised into a number of working groups. The Network's mission is to promote the development and delivery of effective insurance services for low-income people by encouraging shared learning. and providing a multi-stakeholder platform. Structure The Microinsurance Network is coordinated by the Board of directors and asecretariat. Raises awareness on the demand and potential for microinsurance among key stakeholders.

Demand and Dissemination) were created to better coordinate the group’s activities. DFID and the ILO. the first Working Groups (Operations. 16 experts met for the first time in Geneva to discuss the need for an exchange and learning platform to ensure microinsurance fulfils its potential. After having outgrown its informal systems and procedures. . as of the 31 May 2012. the Microinsurance Network became an independent structure and registered as a non-for-profit organisation in Luxembourg. GTZ. The Microinsurance Network was officially launched in 2009. the Microinsurance Network decided in 2007 that it needed a clearer membership and organisational structure to accommodate the expansion of interest and activities in microinsurance and the arrival of more and new stakeholders. multilateral agencies. in May 2003 in London. A year after the first meeting.History The Microinsurance Network was originally established in 2002 as the CGAP Working Group on Microinsurance by donor organisations. In March 2002. Since then. 2012 is also the 10 year anniversary of the Microinsurance Network. In addition. More than twenty case studies. The result was the first project of the Network: "The Good and Bad Practices in Microinsurance" project. co-funded by Sida. were published from 2004 to 2006 and provided the basis for the key publication "Protecting the Poor: A Microinsurance Compendium" in 2006 and the Microinsurance In Focusnotes. insurance professionals and other interested parties involved in the promotion and support of microinsurance in developing countries. the Network has grown to have just under 70 institutional members representing over 200 experts in 15 different working and discussion groups.

The annual event is sponsored and co-organised by Munich Re Foundation. The Microinsurance Network always holds its General Assembly on the day after the conference . Dakar (Senegal).International Microinsurance Conference The International Microinsurance Conference brings together experts from around the world and from all types of institutions to exchange experiences and discuss the challenges of extending insurance services to low-income people. Tanzania in November 2012. The first International Microinsurance Conference was held in Munich (Germany) in October 2005 and brought together over 90 experts. Mumbai (India). Cartagena (Columbia). Subsequent conferences were held in Cape Town (South Africa). The next conference will be held in Dar es Salaam. Manila (Philippines) and Rio de Janeiro (Brazil).