IFAD - the International Fund for Agricultural Development - is one of the Network’s longest-standing members. We talked to Francesco Rispoli, now IFAD’s Country Programme Manager for Rwanda and Tanzania (previously Senior Technical Specialist in Inclusive Rural Financial Services) about the future for agricultural Microinsurance and his time as a MiN Board member.
Emily Coleman, Insurance Specialist at IFAD and also a MiN member contributed to this interview.
MiN: How has the MiN evolved since IFAD joined ten years ago?
Francesco: IFAD joined around the time the first MiN strategy was presented at the International Microinsurance Conference (IMC) in Cartagena (2008). In those days it was more informal, a more close-knit culture, but it remains an organisation in which members are easily approachable. The MiN reduces organisational barriers - at events, it’s like a badge which breaks down boundaries for collaboration and information sharing. Since then the Network has grown and diversified in membership, has become more global, and become a great source of knowledge - for example, by organising the Expert Forums.
MiN: What is IFAD’s involvement in insurance?
Francesco: IFAD works on opening up a variety of financial services for rural communities. When it comes to agricultural insurance, we are a leading investor in rural development, but sustainability is threatened by shocks, so we work with beneficiaries and partners who are vulnerable to risk. Insurance is a cross-cutting tool to complement and strengthen IFAD’s activities. As a member of the MiN Board, for instance, I spoke on the importance of reaching scale in agricultural insurance, helping to set the scene at the 11th Consultative Forum ahead of the Peru IMC last year - for IFAD it is essential to put the challenges and solutions of reaching the rural poor on the map.
We work on three pillars: design and implementation support, knowledge management and capacity building and global engagement and public goods. A big part of this is providing technical assistance to IFAD-financed, government-implemented programmes in different countries. We’re currently running two projects which do this. One is financed by IFAD and implemented by the Microinsurance Centre (MIC) at Milliman, called “Managing risks for rural development: promoting microinsurance innovations” . It is working in China, Ethiopia and Georgia. Another is called Insurance for Rural Resilience and Economic Development (INSURED), which is financed by Sida and implemented by IFAD, It is a global programme, but has some core activities in Cambodia, Indonesia, Uganda, and Zambia.
MiN: What is your view of the current global microinsurance market?
Francesco: The challenges have been around for a long time, although there are some new innovations which are helping to overcome them. In terms of agricultural insurance, there are challenges both around the products being offered and their distribution. Products are hampered by the limited quality and quantity of on-the-ground data, especially for index insurance in developing countries. That hinders the design and future growth of insurance markets. The cost and replication of development is another significant issue - there’s a common misunderstanding that index insurance products can be “one size fits all”, but they are not and need to be context-specific.
On the distribution side, it’s the challenge of delivering at scale in order for markets to be sustainable. Bundling with other services and using InsurTech to make products more cost-efficient both for consumers and insurers will help improve distribution.
There’s a lack of general financial literacy, and this is more pronounced when it comes to insurance. In some countries, insurance is not even considered as part of efforts to improve financial literacy. There’s a real need for local and national capacity building programmes.
On the other hand, there are significant opportunities. From IFAD’s point of view, one way is linking to existing development programmes. For example, IFAD-financed programmes can help connect the dots. They are implemented by the government, partner with public and private sector institutions, and, at micro level, work with the rural poor, often grouping them help improve access to different products and services.
MiN: Where do you stand on the micro vs inclusive insurance debate?
Francesco: It is certainly true that some of the issues being discussed are not restricted to just the micro-level . What we at IFAD and also at the Network are doing, is focusing on all the different parts that need to be in place for there to be sustainable access to insurance to benefit low-income people. This means working at the level of government policy and regulation, improving the capacity of institutions, and understanding the real demand of people we are hoping to benefit. There are different approaches for agricultural insurance that all have a role – macro, meso, and micro-level agricultural insurance -it depends on the need.
MiN: Looking back on your time as MiN Board member, what can you say has been successfully achieved and left as a legacy?
Francesco: As I step down from the Board, I’m proud that I have helped the MiN by successfully guiding it through a period of change, by serving the members and getting the global community to understand more about microinsurance. I’d like to think I have been a champion of microinsurance for smallholders, and for agricultural and rural development, by putting that on the MiN agenda at different events and strategies.
MiN: What three key things have you learned that you would like to share with your fellow MiN members?
Francesco: Firstly, going back to basics is important, otherwise misunderstandings can hinder growth. It’s easy to assume that everybody has followed all the lessons and debate, but there is a lot of awareness raising and capacity building that still needs to take place. Secondly, you don’t always have to push microinsurance - it’s more important to help people think about it objectively - what is the tool or service they would need, which would help them most? And finally, we need to have patience, developing sustainable solutions takes time!
MiN: Looking ahead, what should the MiN be working on? Where is the greatest need?
Francesco: There’s still a big gap in capacity development and learning. The Network is well-placed to do that with governments, donors and development partners. There’s an important advocacy role to play.
The MiN should continue to build its regional support, especially linking it with learning events in the regions for local institutions, governments and donors. This can be done using the wealth of technical expertise in the Network, and linking with existing in-country insurance working groups such as what was done the technical Advisory Group (TAG) in Zambia.
We should definitely continue with the Landscape studies - they are incredibly useful. IFAD, for example, uses the studies for training background and to help explain the case for microinsurance development in specific countries.
Finally, we should continue to stress the links between microinsurance and the UN Sustainable Development Goals (SDGs), so people can see microinsurance is not just a standalone product, but a tool which contributes to other objectives.