The rise of Micro-re: Why the reinsurance business in microinsurance is growing
Between 2023 and 2024, the number of people covered by microinsurance products grew from 331 million to 344 million. While this points to continued growth of inclusive insurance, it also means microinsurance providers may face higher risk exposure. This is complemented by a growing incidence of frequent and severe natural disasters, which may affect microinsurance products’ pricing. Local underwriters may either be unable or unwilling to take on risks that they cannot price or are not familiar with. As a result, several microinsurance schemes may rely on global reinsurers to share the risk.
Figure 1: Proportion of microinsurance products that are reinsured, 2024
Source: Microinsurance Network, (2025). The Landscape of Microinsurance
While some global reinsurers, such as Hannover Re and Swiss Re, are becoming increasingly involved in microinsurance, some microinsurance providers are also looking to offer reinsurance. A small number of technical service providers have either launched their own reinsurance arms or are planning to do so. Collectively, both types of organisations are driving the growth of reinsurance capacity in the microinsurance space. However, each type will likely have a different motivation for this.
Box 1: Reinsurance insights from the 2024 Landscape on Microinsurance
The 2024 Landscape of Microinsurance report found that approximately 20% of microinsurance products utilised reinsurance. Insurers were likely to use reinsurance for certain risks that could cause balance-sheet volatility, and to share risks for products they lacked experience in underwriting. As a result, some products are more likely to be reinsured than others. Based on data published in the 2024 Landscape report, agricultural microinsurance products were the most likely to be reinsured. Nearly half of agricultural-insurance products reported being reinsured. Such products typically cover highly volatile climate risks, which are naturally associated with significant catastrophic elements. In many cases, many local insurance companies are likely to have limited experience in modelling and pricing such risks. |
Most microinsurance providers typically act as intermediaries, playing an important role in aligning other actors within their respective value chains. Despite this, microinsurance providers face several barriers to growth. They could be disintermediated by local underwriters, but equally run the risk of not recouping a fair or viable return for their investments. Natural progression for microinsurance providers would be to get involved in underwriting themselves. While one option would be to sell the business to an underwriter, opening a reinsurance fund has proven more attractive for some.
Currently, MIC Global is one of the most well-known microinsurance providers to have ventured into the reinsurance space. Its recent collaborations show an appetite to provide reinsurance cover for digital insurance products. In September 2024, it partnered with the General Insurance Corporation of India to provide digital reinsurance to India’s insurance providers. In November 2024, MIC Global partnered with VOOM Insurance, an Insurtech, to provide reinsurance for the latter’s rideshare business.
“As microinsurance intermediaries mature, the drawbacks of the model result in a desire to become the underwriter; being a reinsurer enables working in multiple countries, which facilitates scale and is an efficient use of capital.” Richard Leftley, CEO – Wavu Limited |
Beyond covering digital-first products, reinsurance is necessary where there is a high risk of catastrophe. This is a challenge regularly affecting providers focusing on the agricultural sector or climate resilience products. To overcome this, a few agricultural microinsurance providers have started dedicated reinsurance funds. For providers working across several markets, reinsurance means that individual licences are not required for each country: one balance sheet can effectively be used to underwrite programmes across multiple countries. This allows for economies of scale.
One Acre Fund, a social enterprise focused on smallholder farmers in Africa, launched One Acre Fund Re in 2023. This reinsurance fund was designed with support from the International Finance Corporation, the US International Development Finance Corporation (DFC) and African Risk Capacity. This facility will help One Acre Fund design and implement insurance products that offer direct payouts as an effective response to farmers’ crop yield losses. This is part of the company’s aim to cover four million farmers by 2030, backed by reinsurance from One Acre Fund Re.
The example of Blue Marble Microinsurance demonstrates how several global insurers (and reinsurers) can work together to offer microinsurance solutions. Blue Marble is co-owned by Aspen, ASSA, Marsh McLennan, TransRe and Zurich. In March 2025, the company launched its Impact Reinsurance Facility. It will enable insurers and brokers to design and launch “scalable, high-impact” solutions for climate protection (typically via trigger-based parametric coverage). The initiative is backed by Zurich Insurance and a consortium of other global reinsurers.
“With 80% of microinsurance products not being reinsured, there is immense opportunity for reinsurance companies in this space - not only to diversify risk, but to drive inclusive growth by supporting scalable, sustainable protection for underserved markets.” Matthew Genazzini, Executive Director - Microinsurance Network |
For existing reinsurance providers, the microinsurance space presents a growth opportunity in many emerging markets. Expanding their remit to provide reinsurance offers a somewhat less complex entry point into microinsurance. There would be no need to acquire country-specific licences. However, this may not always work for global reinsurers: local insurers may prefer to maintain lucrative local business rather than share risks for some products. Global reinsurers still have an important role to play in providing reinsurance for climate risks or catastrophes.
Among the global reinsurers, Hannover Re has been involved in microinsurance for some time. It has a dedicated practice for parametric insurance solutions, and is routinely used by several agricultural microinsurance providers. Hannover Re has also been involved in bigger initiatives. In 2018, it launched the Natural Disaster Fund, together with Global Parametrics, as well as the German and UK governments. In June 2025, during London Climate Action Week 2025, Hannover Re doubled its commitment from $50 million of capacity to $100 million.
While global reinsurers’ involvement in microinsurance is not exactly new, lessons from previous attempts offer a set of best practices for current approaches to consider. Open assumptions towards pricing are likely to help reinsurers maintain flexibility and a positive stance on innovation. Paying out large claims during years that see major droughts or floods can have a positive impact overall. For reinsurers to succeed, they would need to be more adventurous about taking on different types of risks (including yield index risks). Finally, reinsurers would need an openness to reinsuring small schemes, which can take time to scale up.
For the microinsurance space, greater reinsurance capacity can be particularly beneficial. Beyond the microinsurance intermediaries, insurance underwriters can use reinsurance to de-risk innovative microinsurance solutions. The involvement of a global reinsurer can also enhance the credibility of the microinsurance product and value chain in general. In turn, this could lead to more customer and investor confidence in the products and the sector as a whole.