Microinsurance for Health and Agricultural Risks

Demonstrating viability of insurance for the low-income market
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This paper describes MicroEnsure’'s specialized insurance services in the areas of general insurance, health insurance and weather insurance.

MicroEnsure’'s model is based on the concept that providing insurance to the poor involves carrying risk, acting as the front sales office and conducting back office functions effectively. It found that back office functions that linked MFIs and insurers was the weakest element in the model. MicroEnsure set out to fill the void for a specialized back-office provider.

The MicroEnsure model uses a range of entities to carry the risk, such as local insurers for life and property, international reinsurers like Swiss Re for weather insurance and reinsurance pools using insurance companies’ capital for health insurance. The paper states that MicroEnsure:

  • Reaches more than 3.5 million people with a range of life, health and weather index products;
  • Partners with MFIs, child-sponsorship organizations, NGOs, retailers and individuals;
  • MicroEnsure gets heavily involved in designing products for others, although it does not carry risk on its own balance sheet;
  • Plays a key role in training front office staff and educating clients using comic books to ensure people understand the products they are purchasing.