Microinsurance: Reducing the Vulnerability of Families in the Face of Unexpected Situations – Policy Statement

This paper is Développement International Desjardins’s (DID) policy statement on microinsurance. Microinsurance is a separate sector from microfinance although it supplements microfinance. Key points in DID’s policy statement include:

• Microinsurance stakeholders need to reach target populations on one hand and secure and diversify risks on the other;
• Access to appropriate insurance is essential to reduce vulnerability and improve living standards of marginalized populations;
• Insurance helps to meet the different needs of disadvantaged clients, along with credit, savings and access to the payment system;
• It is important to raise awareness of insurance among the population and stakeholders before offering insurance products;
• MFIs that offer microinsurance should honor promises and establish lasting relationships based on trust;
• MFIs and networks represent an optimum distribution channel for microinsurance products because of their proximity to marginalized populations;
• DID favors a dual and distinct management structure that integrates accredited and formal players and a distribution network that understands people’s needs.

The policy statement also covers the topics of using microinsurance experts, reinsurance, microinsurance legislation, intermediaries, training of staff and different types of microinsurance products.