Experiences in Micro-Insurance: Report on ProVention Consortium International Workshop

This paper summarizes the key issues discussed at the international workshop, Experiences in Micro-Insurance organized by the ProVention Consortium. It focuses on the specific use of micro-insurance within the context of natural disaster risk reduction.

The paper argues that:

• In developing countries, low-income households would benefit from financial risk transfer and sharing through insurance. However, their access to local and global markets remains quite limited;
• Reaching potential clients is challenging for micro-insurance;
• Micro-insurance must be guided by market demand, and community groups are best able to capture and guide the needs of its members. Successful delivery has been achieved through self-managed community groups;
• Micro-insurance is necessary in the context of disaster risk-reduction. Community groups can provide the vital links between local risk reduction efforts and commercial insurance;
• For sustainable micro-insurance provision, microfinance institutions (MFIs) and NGOs need the expertise and financial backing of the financial sector;
• To attract commercial investment, it might be necessary to pool micro-insurance schemes to make them financially attractive;
• Investing in insurance and disaster risk management can be beneficial for the insurance sector, which gains access to new markets and opportunities.

The paper concludes by saying that the participants of the workshop contributed a range of ideas to further pursue the micro-insurance for disaster risk management initiative.