Beyond Credit Life: Protecting Low-Income Earners and Diversifying Lines of Business
The paper examines ways in which insurers can succeed in providing microinsurance in Middle East and North Africa (MENA) and help make it sustainable. It notes that microinsurance in MENA is still in its early stages of development. Informal workers, migrants, urban and rural poor are often excluded from formal risk management mechanisms.
The paper observes that microinsurance could be a serious alternative to traditional insurance business and may easily become a new revenue generation stream if designed and implemented well. It suggests measures that insurers may need to undertake to develop microinsurance in the region, namely:
- Expanding the range of distribution partners;
- Diversifying insurance products to address the markets risk management needs;
- Using technology to reduce costs and scale up schemes;
- Training agents and partners, as well as insurance professionals;
- Creating a separate department, that is staffed by people who understand the low-income market.
The paper concludes that creating trust amongst the clients and the right enabling environment are imperative to the success of microinsurance in MENA.
