MR Microinsurance_2012_03_29.indd - International Labour ...

Microinsurance and climate change
sistence si sistence stence farmers, where corresponding employment generation schemes are
available.
5. Collaboration of local, national and global stakeholders contributes to success- success-
ful results.
6. Client participation and education are crucial for the sustainability and later
scale-up scale-up of insurance products.
7. Drought-related risks are a primary concern throughout Ethiopia where 85 per
cent of the population is dependent on smallholder, smallholder, rain-fed agriculture. Even
highly-exposed areas such as Ethiopia Ethiopia can be be insured against key risks, e.g. heat
waves or droughts. droughts.
Sources: Adapted from Hellmuth et al., 2009; Agroinsurance, 2011; Swiss Re, 2010a.
4.2.2 Micro, meso and macro
Insurance can be organized in diff erent ways and at diff erent levels – from individual
direct insurance to the state-organized insurance of large groups of people
– as illustrated in Table 4.3. By defi nition, microinsurance may only be applicable
at the micro level. However, insurance organized at the meso- or macro-levels
can be a more relevant way of protecting the poor against risks associated with
weather and climate change. Th e inclusion of meso- and macro-level interventions
enables insurance to cover not just farmers and agriculture risks, but also to
be relevant to protecting other target groups from disasters.
Table 4.3 Dimensions of insurance: Scale, products, benefi ciaries
Micro Meso Macro
Insured Individual, group of people, people, up
Larger community, associations, Nation/government,
to several several hundred people
cooperatives, etc.; thousands to hundreds of thousands to
millions of people
several million people
Geography House, village, town, districts Districts, regions Regions, country
Tools and products Microinsurance: health, life,
property, crops, livestock;
index insurance
Derivatives, index index insurance Catastrophe bonds, pools
Range of sum insured US$50–5 000 US$200 000 to several million US$ millions to billions
Source: Adapted from Munich Re Foundation, 2007.
Th ousands of people are insured through meso-level covers. Benefi ciaries
are often organized in trusts, associations or cooperatives. Box 4.4 provides an
example of an index-based meso solution, which started in 2011 to cover the
loan losses of cooperatives in the Philippines in the event of extreme weather
events and enables the aff ected borrowers to start again. Th e cooperative
insurer CLIMBS acts as the risk carrier and thus covers the portfolios of its
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