Microinsurance: Improving Risk Management for the Poor, No. 7 (French)

Publication Date: Jun 2005
Published by: CGAP Working Group on Microinsurance
Document Type: Newsletter

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Managing risks - Capabilities of the poor enhanced through microinsurance

This bulletin provides a strong case for reinsurance in microfinance stating that the risk management capacity of the poor can be enhanced significantly by promoting this concept. It articulates that reinsurance can play an important role in reducing the fragility of small insurance schemes and reinsurers, therefore, can play a technical oversight role better than donors.

The bulletin highlights some of the advantages of reinsurance, these include:

• Reduces the risk of bankruptcy in bad years;
• By freeing the microinsurer from the unexpected fluctuations of expenses, removes the need for the microinsurer to build up reserves and allows him/her to use the earned surplus during good years.

Further, the bulletin discusses:

• The need to extend microinsurance to women, considering the gender specific risks they are subjected to.
• The high drop out rates of women for reasons of not being able to pay the premiums.

Finally, it concludes that microinsurance needs more partnerships, more flexibility and more follow-up from local and international actors to ensure that the thrust of providing a self-help strategy to the poor to take control their lives is not lost.

The bulletin also provides information on new products, events and latest publications.

The newsletter is available in English, Spanish.