Microinsurance: Providing Profitable Risk Management Options for the Low-Income Market

This presentation examines the role of microinsurance in providing profitable risk management options for the low-income market. The presentation states that:

• Emerging markets will emerge as the frontier for insurance in the 21st century;
• The low-income population faces a number of risks such as the death of an income earner, health expenses, and property loss;
• There is a need to identify risks, assess them and set out risk management strategies for the poor;
• 'Microinsurance' refers to risk-pooling products that are appropriate for the low-income market in terms of costs, coverage and delivery mechanisms;
• Microinsurance types include life, health, property, etc;
• Sales to the low-income market are difficult because of lack of knowledge, limited resources and difficult access - these problems can be solved with appropriate products, good prices, education and accessibility;
• There is a need to look at the basic premium components that would make microinsurance work;
• Investors have various options such as microinsurance brokerage, microinsurance company replication;
• Donors can work with existing institutions, provide regional technical assistance, or invest in green field microinsurers;
• Key considerations for the future would include new delivery channels, remittances and electronic efficiency.

The presentation concludes that there is great demand for microinsurance and great scope for various actors to benefit in this area.