ALMAO and YASIRU, Sri Lanka (CGAP Working Group on Microinsurance Good and Bad Practices Case Study No. 21)

Publication Date: Jan 2006
Published by: CGAP Working Group on Microinsurance
Document Type: Case Study (PDF)

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This study covers two microinsurance schemes targeting the rural poor in Sri Lanka

This study covers two micro-insurance schemes in Sri Lanka - ALMAO and Yasiru. The paper lists the common, as well as the separate features of both companies as follows:

• Common features:
  • Operate through local organizations;
  • Local partners recruit clients, collect premiums and administer claims;
  • They target the local poor.
• ALMAO:
  • Operates through a nationwide network of savings and credit cooperatives;
  • Has developed rapidly;
  • Offers: Coverage for disability, hospitalization, death and maturity; and loan protection, life savings, property and health insurance.
• Yasiru:
  • Partners with local non-government organizations (NGOs);
  • Covers death, disability and hospitalization;
  • Has a low-income profile;
  • Needs to: Reduce costs; increase annual premium sales; and increase the number of reliable partners.

The paper lists the following lessons learnt by the two companies:

• Identify needs through consultations with the target group;
• Build a system with democratic control;
• Cooperate with established partners;
• Offer simple, affordable products;
• Build equity and reserves.

The paper concludes that:

• There is a need for risk management in Sri Lanka across all classes;
• Micro-insurance is useful for the private sector and will build long-term capital;
• ALMAO needs to build up its client-base and develop new products;
• Yasiru needs to increase its network of partners;
• Both companies need to build on awareness, marketing and sales;
• Using existing institutions for distribution is an efficient way to run the service.