Technical Assistance for the Promotion of Microinsurance: The Experience of Opportunity International

This paper draws lessons from the experiences of five MFIs that have introduced insurance with Opportunity International's (OI) technical assistance (TA).

The paper provides a detailed introduction of OI, describing its objectives, concerns and methodology and lists valuable lessons learnt about micro-insurance in the areas of:

• Market research and marketing
  • The first step in designing an insurance product is to understand the demand from the customers;
  • The marketing plan should target both clients and staff;
  • Premiums should be affordable.
• Product design:
  • The product should be simple and easy to explain to clients;
  • All MFIs should have credit life insurance;
  • Most micro-insurance products should be voluntary.
• Claims management:
  • The procedure of making claims should be easy;
  • The MFI should administer the claims itself and then pass on the net amount to the insurer at the end of the month.
• Structuring partnerships:
  • The partner-agent model is usually the simplest, cheapest and quickest way for an MFI to start offering insurance;
  • The MFI should take the initiative to design the product and then solicit price quotes from the insurer.
• Providing technical assistance:
  • MFIs need to access appropriate TA;
  • TA assistance must be demand-driven;
  • There should be a standard approach to product development;
  • A centralized TA facility can promote innovations;
  • MFIs need an insurance-specific information system.