Microinsurance: Risk Protection for 4 Billion People
This paper presents an overview of the global microinsurance market. It highlights distinguishing features of microinsurance across the insurance value chain, discusses value propositions of microinsurance and presents an outlook for the sector in the next decade.
Microinsurance offers a viable alternative for low-income households to manage their risks. It is also considered a vast untapped growth segment for the insurance sector. Microinsurance providers should strive to design schemes that can attain socio-economic objectives and sustainability in order to ensure long-term growth of the sector. The Asia-Pacific region is the world’s largest microinsurance market, and its potential is highest for health and life insurance products. The paper includes case studies of the microfinance and health insurance sectors in India.
The paper states that the future outlook for the sector is positive given the strong growth of microinsurance in recent years and its role in socio-economic development. Key challenges include:
- Creating an insurance-buying culture among low-income households;
- Developing sustainable low-cost operation models and innovative distribution channels;
- Adopting regulations that facilitate market development;
- Encouraging active stakeholder participation.