Making Insurance Markets Work for the Poor: Microinsurance Policy, Regulation and Supervision - Evidence from Five Country Case Studies

This report examines the role of policy, regulation and supervision in microinsurance development in five countries namely, Colombia, India, the Philippines, South Africa and Uganda.

Many poor people remain without adequate protection despite the growing importance and rapid expansion of microinsurance. Salient features of microinsurance markets in the sample countries include low uptake, large low income population, high levels of informality and low risk in microinsurance. Study findings emphasise the need for a comprehensive approach that is tailored to domestic conditions.

The report uses evidence from the case studies to extract lessons that should guide policymakers, regulators and supervisors in supporting the development of microinsurance in their jurisdiction. They include:

• Take active steps to develop a microinsurance market;
• Adopt microinsurance policy as part of the broader goal of financial inclusion;
• Define a microinsurance product category;
• Tailor regulation to the risk character of the microinsurance product category;
• Allow microinsurance underwriting by multiple entities;
• Provide a path for formalization;
• Create a flexible regime for microinsurance distribution;
• Facilitate active microinsurance selling;
• Monitor market developments and respond with appropriate regulatory adjustments;
• Use market capacity to support supervision in low risk areas.