Moving on to international microinsurance I’d like to highlight the state of microinsurance in

two of our neighbouroing countries.

Starting with Pakistan –
The microinsurance sector is relatively new in Pakistan. The first microinsurance providers
were created in the 1980’s and in the 1990’s.
Since 32% households in Pakistan live below the poverty line and there is a large
potential for microinsurance. If properly designed and delivered, microinsurance would
also help in reducing the vulnerability of low-income households.
At present, there is a panel of about 150 hospitals listed for health microinsurance
clients all over Pakistan. The profit they earn out of the treatment of these clients is invested
in the infrastructures, cost of radiology, lab facilities, operation theatres and in many other
amenities.
Well Pakistan still needs a sustained effort to raise awareness amongst its people with regard
to the benefit of insurance, followed by the delivery of insurance products to the poor. There
is also great scope in Pakistan to diversify microinsurance products, for example, crop
insurance. Indeed, there is a direct need of agriculture microinsurance.
The government is also currently working on microfinance policy. It is involved in many
social protection programmes, one of which is Benazir Income Support Programme (a cash
grant programme being implemented nationwide and aiming to cover 3.5 million women
during its first round).
COMING TO BANGLADESH
The rise in the number of innovative insurance schemes has definitely helped strengthen
the microinsurance sector of Bangladesh over the past decade.However, despite essential
innovations addressing the needs of specific sectors, the prevalence of overlapping schemes
and micro-scale outreach has made it difficult to achieve the ultimate objective of
offering unique microinsurance programs throughout the country.
Even after implementing several targeted microinsurance schemes, the penetration power of
insurance companies in rural areas is significantly low. The sector is yet to bring the
population segment that would benefit the most, under microinsurance coverage.
alsoThe lack of awareness or poor understanding of insurance schemes among farmers
and the overall rural population is one of the critical issues the microinsurance
providers face in Bangladesh.

The prevalence of asymmetric information in rural areas is a major challenge to be tackled by

microinsurance providers. It has been seen that whenever an individual buys an insurance
product, they tend to participate in risky activities that they would not have done if they were
not insured.