Improving the Social Protection of the Urban Poor and Near-Poor in Jordan - The Potential of Micro-Insurance
This paper assesses the protection of the urban poor and near-poor, their need for additional protection and their potential demand for micro-insurance. Using a survey of 139 households in Jordan from February to April 2001, it explored:
- How the social protection of vulnerable groups in Jordan can best be improved;
- Analysed possible strategies to improve the social protection of urban low-income groups in Jordan and potential approaches for development co-operation to support these strategies and;
- Looked at the potential of micro-insurance in Jordan along a list of criteria derived from recent experience with micro-insurance in other countries.
The paper argues that:
- Micro-insurance is a new promising approach to reducing the vulnerability of urban population groups that are difficult for conventional social protection strategies to cover;
- The vulnerability of households to risks (such as the death, work disability or unemployment of their provider, illness or old age) is a major factor contributing to widespread poverty in Jordan;
- Almost half the population lacks access to social protection instruments, and hence the occurrence of risks leads to serious declines in well-being ? often below the poverty line.
The study reveals that a high number of urban households would be willing to provide for the future and are able to pay small insurance primiums but lack adequate provisioning offers. Hence the paper proposes that non-governmental and commercial institutions in Jordan should seek partnership in micro-insurance projects and recommends that donors support such initiatives. Wraps up with the design of a suitable product and outlines the potential organisational shape of co-operation between non-governmental organisations and commercial insurance companies.
