MR Microinsurance_2012_03_29.indd - International Labour ...

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1 Current trends in microinsurance
Craig Churchill and Michael J. McCord
The authors wish to thank the following reviewers for their detailed and perspicacious comments:
Doubell Chamberlain (Cenfri), Iddo Dror (Micro Insurance Academy), Veronique Faber (Microinsurance
Network), Jeanna Holtz (ILO), Brandon Mathews (Zurich), Lisa Morgan (Milliman), Dirk Reinhard
(Munich Re Foundation), Jim Roth (Leapfrog) and Rupalee Ruchismita (CIRM).
Microinsurance is developing at a breathtaking pace, with numerous innovations
emerging to meet the challenge of providing insurance to low-income people.
New products covering a variety of risks are being launched and distributed to
poor households through an increasing diversity of channels. Entertaining consumer
education tools are being used to create better-informed consumers.
Insurance authorities are adapting their regulations to facilitate the expansion of
insurance to the poor. In short, millions more low-income households now have
access to better insurance cover.
To introduce this second volume of Protecting the poor, this chapter describes
five trends that reflect the dramatically changing state of affairs for microinsurance:
1. The definition of microinsurance is becoming operational.
2. More low-income households are covered by insurance.
3. Stakeholders in microinsurance are becoming more diverse.
4. Providers are offering an expanding and varied range of products.
5. There is greater concern that insurance provides real value to the insured.
1.1 The definition of microinsurance is becoming operational
The first of the five trends is that the definition of microinsurance is becoming
operational. In the first volume, microinsurance was defined as follows:
Microinsurance is the protection of low-income people against specific perils in
exchange for regular premium payments proportionate to the likelihood and cost of
the risk involved. This definition is essentially the same as one might use for regular
insurance except for the clearly prescribed target market: low-income people … How
poor do people have to be for their insurance protection to be considered micro? The
answer varies by country, but generally microinsurance is for persons ignored by mainstream
commercial and social insurance schemes, persons who have not had access to
appropriate products.
Churchill, 2006, pp. 12-13.