Making Public-Private Partnerships Work in Insurance

This paper aims to help governments and private participants establish successful public-private partnerships (PPPs) in the insurance sector. An insurance PPP is a contractual agreement between the public sector, represented by a ministry or local authority through a government program, and the private sector, which includes the insurance industry and its service providers and distribution partners. These agreements seek to combine business objectives with public policy goals in a cost-efficient and effective way. Based on four case studies from Colombia, India, Mexico, and Peru, the paper provides ten recommendations for establishing successful PPPs in the insurance sector. Recommendations include:

• Combine a strategic approach with flexibility;
• Define your target beneficiaries clearly;
• There is need for a solid regulatory and legal framework;
• Use insurers as an ally to achieve public policy objectives;
• Allocate roles clearly between the public and private sectors;
• Take account of the capacity-building needs of the different levels of the public sector;
• Build private sector's capacity around best practices, product innovations, pricing, reinsurance, distribution, and technology;
• Endeavour to improve the value of products to be offered through PPPs;
• Include monitoring and evaluation systems with clear indicators;
• Take a knowledge-management approach by documenting lessons, and measuring and sharing results.