The microinsurance sector, which has shown a rapid growth over the last 10 years, is expected to double by 2020, as governments, insurance companies and providers worldwide broaden the geographic scope and range of insurance services available to low-income people. “Microinsurance, which currently provides coverage to 500 million people, could pass the 1 billion mark by the end of the decade,” says Craig Churchill, Chair of the Microinsurance Network and Head of the ILO’s Microinsurance Innovation Facility.
With this rapid expansion, the Microinsurance Network acquired its own institutional legal status in May 2012. “Becoming independent enables the Network to assume a greater leadership role in the sector, serving its mission of promoting the development and delivery of effective insurance services for low-income people,” explains the Network’s Executive Director Véronique Faber. Since its inception the Network has benefitted from the support of its diverse membership, the German Development Cooperation (BMZ), and particularly the Luxembourgish government which has assumed an increasingly important role in the global microinsurance sector.
In many developing countries, microinsurance providers are playing an important role in increasing resilience of low-income people to daily and catastrophic risks such as crop failure, illness and impact from climate change. “The expansion of the sector is being facilitated by the emergence of alternative distribution channels and public-private partnerships, the adoption of technological innovations as well as an increased awareness amongst insurance companies of the business case for microinsurance,” says Eugenio Velasques from Bradesco Seguros e Previdência, one of the leading insurance companies in Brazil. Furthermore, the development of appropriate insurance regulations and setting of standards measuring impact and client value, are playing a key role in achieving long term sustainability of the sector.
So what can policymakers, insurers and providers expect from the Microinsurance Network in 2013? “The Network will be focussing on its four strategic outcomes: Increased supply, improved client value, conducive environment and enabling infrastructure,” explains Ms Faber. Amongst other initiatives, this will entail the drafting of guidelines for agricultural microinsurance schemes and the compilation of lessons from health microinsurance.