Microinsurance: An Overview of Client, Provider and Support Perspectives

This note provides insights on the issues related to microinsurance and how microinsurance can be used to reduce the risk exposure of the low income population.

The document presents an overview of current state of affairs for the microinsurance sector and talks about the following:

• Insurability of low income population;
• Importance of microinsurance for such groups.

The note also provides a detailed analysis of the sector from the perspectives of:

• Clients:
  • The aspects related to risk in terms of primary and secondary losses due to various existing risks and the different coping mechanisms used by people to deal with these risks;
  • Design of new insurance products giving due consideration to the needs of these groups and about the role of microfinance institutions in spreading microinsurance.
• Providers:
  • An overview of the insurance industry, basic objective of microinsurance and different modes of microinsurance delivery;
  • The concept of insurance along with the common practices followed in the insurance industry.
• Supporters:
  • The role and importance of different supporters assisting microinsurance to grow.

The document concludes by discussing the possible challenges associated with scaling of this sector.