Microinsurance: Improving Risk Management for the Poor, No. 6

Publication Date: Mar 2005
Published by: CGAP Working Group on Microinsurance
Document Type: Newsletter (PDF)

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What are the criteria for successful microinsurance?

MICROINSURANCE is a quarterly newsletter issued by The Working Group on Micro insurance. This particular edition comprised of the following articles:

• Some criteria for successful microinsurance: The presented criteria are the result of theoretical considerations and practical experience. No assertion is made that all of them must be present in order to be successful in microinsurance or that other sets of criteria could not work;
• Microinsurance and social protection: Alternative insurance structures and their complementary relationships to each other are illustrated by the insurance pyramid. It is divided into four sections defining the key insurance types – social insurance, collectively bargained insurance, other group insurance, and individual insurance;
• Case study: TYM’s Mutual Assistance Fund, Vietnam:

• The TYM Fund or Compassionate Fund (TYM stands for Tao Yeu May which literally translates to “I love you”) is a Grameen replication launched in 1993. The fund is managed by the Vietnam Women’s Union (VWU), a mass-based national organization to promote the welfare of Vietnamese women. TYM works predominantly in rural agriculture-based communities. TYM’s members are women living in poor households usually earning less than VND 100,000 ($6.50) a month.
• In 1996, TYM launched the Mutual Assistance Fund (MAF) to protect against the death of a client or family member. The premium is a flat rate rather than a rate based on the size of the loan or the number of family members covered. The target market for the MAF is the same as that for TYM’s loan products;
• The MAF enables the client’s family to better cope with expenses incurred from the member’s death and also relieves the family from the burden of repaying her outstanding debt. At the institutional level, the MAF enables TYM to have an additional level of reserve for its loan portfolio without having to increase its provision expenses;
• TYM’s Mutual Assistance Fund is not a full-fledged microinsurance product. From the beginning, MAF was touted as community-based financial support rather than a financial product aimed at mitigating key risks faced by poor households.

• Websites;
• Terms and Definitions;
• Events;
• About an insurance product;
• Latest Publications;
• News from the Working Group;
• The Working Group’s Case Studies.

The newsletter is available in French, Russian.