Disaster insurance for the poor? A review of microinsurance for natural disaster risks in developing countries


This study reviews microinsurance schemes that provide cover for natural disaster risks in developing countries. It is not intended to be exhaustive—many schemes are in the planning stages and there is only limited, open-source information—but to give an overview of the potential and the challenges of microinsurance for the poor. The study opens with a discussion of the benefits and limitations of risk transfer and risk pooling. The different organizational and institutional forms that microinsurance can take are described in section 3. Section 4 presents the evidence available on the organization, scope, and operations of the disaster microinsurance programs reviewed. In section 5 the viability of catastrophe microinsurance is examined in terms of four criteria: its contribution to risk reduction, its financial robustness, its affordability, and governance. The paper concludes with a summary of the main findings with regard to the potential of catastrophe microinsurance to protect the poor against the consequences of natural disaster shocks and to the significant challenges in making this protection viable.






Reinhard Mechler,oanne Linnerooth-Bayer, David Peppiatt

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