Making Insurance Markets Work for the Poor in Botswana, Lesotho, Namibia and Swaziland - Scoping Study

This document presents a scooping study on access to insurance services by the poor in Botswana, Lesotho, Namibia and Swaziland. The study aims to:

• Provide an overview of the current situation in these markets;
• Outline the current market structure and document the dynamics and current initiatives.

The paper argues that:

• It is important to consider the broader risk framework when evaluating any notion of access to insurance services;
• Risk mitigation extends beyond insurance to include other options such as savings;
• Not all risks faced by lower-income households conform to what is considered to be insurable.

The paper examines the following aspects of insurance in the countries studied:

• Government and informal provisions;
• Short-term and long-term insurance;
• Regulation;
• Innovation;
• Distribution and premium collection;
• Competition.

The paper concludes by summarizing key issues for all the countries studied:

• HIV/Aids: insurance can facilitate treatment by designing appropriate insurance products;
• Distribution and payment collection: infrastructure has to be developed to make transactions easier;
• Regulation: it is still in the process of development;
• Lack of market and demographic information: this makes development and pricing of products difficult;
• Dominance by foreign insurers: this leads to lack of local product development;
• Informal providers: they play an essential role, but it is not clear how they could fit into the formal financial sector and regulatory framework;
• Consumer education and financial literacy: these are yet to be developed.