Microinsurance E-Note 3

This document, which examines aspects of microinsurance in the countries of the south, was prepared by the Policy Research Centre for Co-operative Entrepreneurship in cooperation with BRS, formerly the Belgische Raiffeisenstichting (Belgian Raiffeisen Foundation), the international social section of Cera. The paper states that:

• Microinsurance covers population groups with little or no coverage from other protective mechanisms.
• Microinsurance is attractive because of its:
  • Affordability;
  • Adaptation of services to the target clientele;
  • Use of existing institutions and systems to implement and manage the insurance.
• It usually covers risks relating to health or death.
• Mutual insurance models are most frequently used to develop mechanisms for excluded persons.
• Cooperatives and mutual health insurance funds have benefits that include:
  • Insurance policies that completely reflect the needs of the clients;
  • The development of supplementary services for their insurance products;
  • Distribution of profits to ensure expansion of the cooperative and individual gain;
  • The creation of federations that defend member interests.
• Microinsurance provides a formal, structural answer to the vulnerability of the population in developing countries and comes into play where savings and credit fail to help.
• A mutual health insurance fund offers health care to its members at cheap rates in exchange for a regular premium.
• In many countries, microinsurance is now being included in social security systems.

The paper concludes by describing the work of various Belgian actors in the areas of micro health insurance and mutual health insurance funds.