Microinsurance -

Challenges and the Possible Role of Development Cooperation

Jennifer Hennig, German Technical Cooperation (GTZ)

Regional Conference on Enhancing Social Protection in the Asia and Pacific Region
21-22 April 2010, Manila

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the
views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB
does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their
use. Terminology used may not necessarily be consistent with ADB official terms.
19.04.2010 Seite
Page11
 Microinsurance and Social Protection

Social Protection programs can break the vicious cycle

between vulnerability and poverty

Social security Traditional mutually Commercial

programmes: supportive groups: insurance products:
Informal sector Erosion of the usually not
often excluded traditional structure affordable to the
of society majority of the
population

Æ Microinsurance as a complementary instrument to extend

coverage of social protection in the informal sector

19.04.2010 Seite
Page22
 Micro-Level

Limited information on client side:

ƒ E.g. Indonesia/ Tanzania
ƒ „Insurance is like gambling“
Æ Insurance literacy campaigns

The objective of insurance literacy campaigns:

- To inform about the potential of microinsurance
as a household risk management tool
- To explain how (micro)insurance works
- Educate on the DOs & DON’Ts when
buying insurance

19.04.2010 Seite
Page33
 Micro-Level

Limited Capacity on the provider side:

Æ Performance Based Indicators

• Nine key principles
• Ten key indicators

Example : Indicator 4: Renewal Ratio

How to calculate it:

Renewal rate = Number of Renewals/
Number of Potential Renewals

Further information: http://www.microfact.org/microinsurance-

workshops/

19.04.2010 Seite
Page44
 Meso-Level

Permanent support structure for microinsurance not in place:

Æ CHIC (Centre for Health Insurance Competence) approach:

• develop insurance products, benefit packages,

• carry out seminars and training courses
• represent the interests of local initiatives on the political level
• support a better partnership between the state, business and civil
society

Æ CHIC-Management Seminar

19.04.2010 Seite
Page55
 Makro-Level

Lack of a conducive regulatory and legal framework for microinsurance:

ÆMIPSS: formulation of a National Strategy to develop an insurance market

for the poor has been initiated

- Appropriate policy and regulatory environment

- Strategies to formalize informal insurance schemes
- National Strategy on Financial Literacy on Microinsurance

Further information: www.microinsurance.org

19.04.2010 Seite
Page66
 Thank you for your attention!

Jennifer Hennig, German Technical Cooperation (GTZ)

jennifer.hennig@gtz.de

19.04.2010 Seite
Page77