Case Study

La Equidad Seguros, Colombia

Are low-income households potential clients for insurance?
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This paper examines the activities of the company La Equidad Seguros, focusing on the expansion of its products for specialized MFIs and their clients. The paper states that:

  • La Equidad has developed two group-based life insurance products for lower- income households, called Amparar and Equivida;
  • It is showing that low-income people can invest in insurance if the product, the insurance channel and the premium are appropriate for them;
  • It has had less success in marketing microinsurance through cooperatives;
  • For MFIs specializing in microcredit, like WWF, Amparar expands the products available to them in a profitable way.

The paper argues that:

  • With appropriate training, field staff of an MFI or a cooperative can sell voluntary life insurance to the low-income market;
  • Microinsurance products should be simple;
  • They should have a range of benefit options;
  • Premiums should be adjusted to the capacity of the target market;
  • Group products are more appropriate because they are less expensive;
  • La Equidad has experienced difficulties such as management information systems (MIS) limitations and a lack of insurance culture;
  • It is important to work only with financially viable MFIs.

The paper concludes with a discussion of future steps, such as:

  • Finding new MFIs that can sell a product on a large scale;
  • Raising awareness of what is available in the market and in government programs.

About this Publication

By Almeyda, G. & Jaramillo, F.P.