MR Microinsurance_2012_03_29.indd - International Labour ...

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14 Emerging practices in consumer education on risk
management and insurance
Iddo Dror, Aparna Dalal and Michal Matul
This chapter is adapted from Briefing Note No. 3, published by the ILO’s Microinsurance Innovation
Facility (2010). The authors thank a host of reviewers for valuable comments on this note: Helen Barnes
(CARE International UK), Hennie Bester (Cenfri), Virginia Bethe (ILO), Monique Cohen (Microfinance
Opportunities), Alejandra Diaz (Fundaseg), Jeanna Holtz (ILO), Thabo Gumbi (Hollard Insurance),
Jeremy Leach (Hollard Insurance), Marcia Metcalfe (Freedom from Hunger), Viviene Pearson (South
African Insurance Association), Caroline Phily (ILO), Anja Smith (Cenfri), Evelyn Stark (Bill & Melinda
Gates Foundation), Jasmin Suministrado (ILO), Peter Wrede (AKAM) and Mary Yang (ILO). In particular,
they thank Sarah Bel (ILO) for her comments and collaboration throughout the study.
Consumer education in microinsurance involves a systematic effort to teach risk
management strategies and the role of insurance in order to promote better risk
management practices amongst low-income households. The goal of consumer
education is to provide households with knowledge and skills that enable them
to make informed financial decisions. Consumer education can be delivered by
microinsurers, outsourced to partner organizations such as distribution channels
or specialized training institutions, or be part of a collaborative national effort by
government or industry bodies.
Consumer education is often considered to be an integral part of microinsurance
schemes; it is intended to benefit both microinsurance practitioners and
their clients. It is supposed to help low-income households make sound choices
and practitioners stimulate demand. The current lack of academic and business
research, however, makes it difficult to prove whether consumer education can
keep its promise. New evidence from a host of on-going evaluations in Brazil,
Colombia, Ghana, India, Kenya and South Africa will be available in the coming
years to shed light on this question. Until then, lessons based on the experiences
of practitioners serve as the best guide for those designing new consumer education
programmes.
Given the growing number of consumer education programmes and the huge
demand for capacity building, the Insurance Education Working Group of the
Microinsurance Network decided to compile a list of emerging practices that
microinsurance practitioners should consider when designing education programmes.
This note summarizes feedback from more than fifty practitioners who
were early implementers of consumer education schemes. Their feedback is documented
in three studies (Dror et al., 2010; Burns and Dalal, 2010; Smith et al.,
2010b) supported by the ILO’s Microinsurance Innovation Facility and the
Microinsurance Network.