Making Insurance Work for the Poor: Current Practices and Lessons Learnt (Microinsurance Conference 2005)

This report captures the activities of the Microinsurance Conference, 2005. The conference was organized by the Munich Re foundation with support from the CGAP working group on microinsurance. Around a hundred selected experts from international organizations, non-government organizations, development-aid organizations and the insurance industry from 24 countries participated in the conference to share their experience and discuss possible solutions for the implementation of microinsurance.Some of the points raised in the panel discussions in the conference and reproduced in the report are:

• The need for microinsurance in the lower income groups that are prone to bad health since their basic needs of food, water and sanitation are not fulfilled. The poor are also exposed to greater danger when natural disasters strike.
• Understanding the challenges in delivery of microfinance and its market potential.
• Presentation of case studies of successful and unsuccessful insurance providers in developing countries.
• Setting up of working groups to develop sustainable microinsurance services by:
  • Developing ideas for marketing and distribution channels
  • Minimizing transaction costs and maximizing customer service during premium collection and claims payment, taking into account that the clientele served is highly fragmented.
  • Designing products to suit the income profile of the targeted households.
  • Developing underwriting and claims processes.
  • Working out strategies to make microinsurance a sustainable idea.

The report also documents discussions on:

• The roles of insurers, reinsurers, technical assistance providers, donors, regulators and the Government in the microinsurance sector to bring it to the mainstream.
• Models for delivery mechanisms, such as, partner-agent model, direct sales model, partnership amongst service providers and community based model.

The report conveys the idea that public and private institutions should work in tandem to deliver coverage, accessibility, timeliness, affordability and value for money in microinsurance services and upscale them from their current penetration levels.