Glad to see insurance mentioned in this discussion. Indeed it would be hard to envision how low-income families could manage risk without access to a portfolio of flexible and affordable financial instruments, in which insurance plays a critical role along loans and savings (for a well-timed blog about the various strengths and weaknesses of these three products for risk management, please see http://cfi-blog.org/2015/06/15/whats-insurance-got-to-do-with-it/.)
As Derek references, the World Map of Microinsurance – a program of the MicroInsurance Network, with the MicroInsurance Centre as implementing partner – does collect comprehensive data on microinsurance. Looking well beyond outreach, this data help give a full picture of the microinsurance products offered, both from the insurer and the client perspective. The data is updated for one region per year (so we will have 2014 Africa data this year, and 2015 Asia data next year). Below is a summary of the landscape data for the most recent three regional studies.
Pure credit-life products are not the norm: of the 48.6 million people identified as covered by microinsurance in LAC in 2013, fewer than 5% had coverage simply for loan balance. Most products reported to the study offer an additional specified benefit, such as through a bundled term life or funeral policy. Credit life-only products are rare in the other regions as well, as financial institutions (MFIs or otherwise) are just one of many distribution channels used to reach low-income people.
| (millions) | LAC | ASIA | AFRICA | Most recent global SUM |
| Year of data | 2013 | 2012 | 2011 | |
| % of Market (total population) | 7.9% | 4.3% | 4.4% | 4.8% |
| GWP (USD M) | 827 | 829 | 548 | 2,204 |
| # Products | >200 | >500 | | 1300 |
| Total lives insured | 48.6 | 170.4 | 44.4 | 263 |
| Life | 32.5 | 83.9 | 33.9 | 150 |
| Credit life ONLY (no other cover offered with the product) | 2.23 | 4.1 | 6.35 | |
| Accident | 20.9 | 77.8 | 2.0 | 101 |
| Health | 7.6 | 29.2 | 2.4 | 39 |
| Property | 2.2 | 7.7 | 0.8 | 11 |
| Ag / Livestock | 2.2 | 23.8 | 0.2 | 26.2 |
A few additional tidbits that get at the questions that Chuck raises regarding microinsurance, all from in 2013 in LAC:
o At least 40% were voluntary covers (20% were mandatory, 14% multiple options, 6% automatic, and 20% no answer)
o 35% of microinsurance covers were tied to a loan of some kind
o Only 25% of MI covers were distributed via MFIs
Thanks to Katie Biese (MicroInsurance Centre) and Manoj Pandey (Microinsurance Network) for the research behind this post.
From: MicrofinancePractice@yahoogroups.com [mailto:MicrofinancePractice@yahoogroups.com]
Sent: Monday, June 15, 2015 1:24 PM
To: MicrofinancePractice@yahoogroups.com
Subject: [MFP] Re: The microfinance delusion: who really wins?
Many thanks for sharing this article, Chuck.
There really needs to be more realistic discussion about the unfortunate direction microfinance has taken. The social consequences of commercialization have been disastrous, but as long as outreach keeps ticking up, who cares, right? Measuring social impact is "difficult" anyway, better to focus on the bottom line.
For estimates of the size of microinsurance markets, you can check out the World Map of Microinsurance at the Microinsurance Centre's website - http://www.microinsurancenetwork.org/world-map-microinsurance. The map references findings from several regional landscape reports conducted in recent years.
Unfortunately, I think we see a lot of the same negative, commercialing trends in microinsurance. Low value products being tacked onto loans, savings, and even mobile airtime, with low customer comprehension, and even worse, low comprehension by insurers about the needs of the low income market.
I'm not convinced that offering insurance and savings is a viable "way out" for MFIs who want to "do right" by their clients. As the article mentions, without public policies creating the necessary conditions, financial services will do nothing to alleviate poverty.
Cheers!
Derek
This message may contain privileged and confidential information intended solely for the addressee. Please do not read, disseminate or copy it unless you are the intended recipient. If this message has been received in error, we kindly ask that you notify the sender immediately by return email and delete all copies of the message from your system.
Posted by: Thierry van Bastelaer <thierry_van_bastelaer@abtassoc.com>
| Reply via web post | • | Reply to sender | • | Reply to group | • | Start a New Topic | • | Messages in this topic (12) |
No comments:
Post a Comment