The Third Way in Social Protection: Group-Based Schemes and the Potential of Micro-Insurance

This presentation discusses the importance of micro-insurance in the context of managing risks by self-help groups through group-based schemes. The presentation:

• Identifies an income-based gap in social protection between the formal and informal sectors;
• Lists 3 ways to improve the social protection of low-income groups:
  • To extend coverage of social insurance,
  • To broaden the outreach of social transfers such as social assistance, public health, etc,
  • To support groups in managing their members' risks.
• Supports the third option and states that many societies are very imaginative in developing group-based strategies of social protection that are well adapted to local needs;
• Describes the features of this way and calls it a bottom-up approach;
• Outlines the tasks performed by the government in the bottom-up approach.

The presentation also discusses various methods by which traditional and self-help groups support individuals in managing risks. It then outlines measures by which risk-managing groups can be supported to be more effective; one of these is promoting networking of groups and linkages to formal schemes.Identifying micro insurance as an important concept in this context, the presentation describes:

• The various features of micro-insurance;
• The partner-agent model of micro-insurance;
• Ways in which micro-insurance can be linked to formal social protection.

The presentation also:

• Discusses the reasons for, and the methods by which, the state can offer support to risk-managing groups;
• Provides the example of crop-insurance as a case for sustainable, self-financing schemes;
• Concludes with pointers on how the state could liberalize legislation.