Managing Microinsurance Products: What are the Delivery Options?

This paper discusses different models used for microinsurance delivery, and begins with stating the key issue of microinsurance the "low cost product". The paper further explains the various models used for microinsurance delivery, as follows:

• Partner agent model:
  • Can focus on core business and expertise;
  • Can sell large number of policies with single agreement;
  • Offers the insurer the access to reinsurance
  • Reduces overhead cost of both the organization's agent and insurance company;
  • Minimizes information asymmetries.
• Micro agent model:
  • Creates insurance distribution infrastructure in low income neighborhoods;
  • Is a commercial entity with financial incentive, long term existence is precarious;
  • Involves direct income to community as micro-agent.
• Branch offices:
  • Have no additional costs for microinsurance products;
  • Help build trust;
  • Involve fewer intermediaries.
• Co-operative;
• Small scale informal inhouse insurance.

The paper concludes by stating that there is no one model which can be labeled as the best; however, the location and timing of model implementation could be one important aspect to be considered.