MR Microinsurance_2012_03_29.indd - International Labour ...

26 Emerging issues
example, a grocery store is likely to be more interested in promoting an insurance
product if the benefit includes a year’s worth of groceries instead of just a cash
benefit. And third, the relationships between insurers and distribution channels
can be challenging to manage. Significant investments need to be made up-front
and at relevant stages to clarify expectations, roles and responsibilities, and to
align incentives. Perhaps one of the most effective means of aligning incentives is
through profit-sharing mechanisms or joint ventures.
1.3.3 Governments
As noted in section 1.2, some governments have been instrumental in supporting
the growth of microinsurance, both through major leaps and incremental
improvements. The involvement of governments in microinsurance has seen a
dramatic increase in recent years. As described in Chapter 25 on regulation,
Chapter 26 on consumer protection, Chapter 2 on social protection, and
illustrated in Chapter 20 in some detail from the experiences in India, governments
can play three key functions with regard to microinsurance:
1. Provider of social protection: Governments have an obligation to provide social
protection to their citizens, including health insurance. However, as described in
Chapter 2, this obligation is not being met in many countries, often due to
financial constraints. In this context, microinsurance can play several different
roles, namely:
a) providing a platform to pursue universal health cover, such as the health
mutuals in Ghana, Mali and Rwanda;
b) extending government benefits to workers in the informal economy, such as
KaSAPI in the Philippines, or by adding value to government schemes, as
with CIC’s Bima ya Jamii (see Chapter 18);
c) providing a supplementary cover to complement social protection benefits; or
d) offering an alternative if government programmes do not reach certain target
groups.
Also, within the context of financial constraints, some governments are
engaging the private sector through public-private partnerships to assist them in
implementing social protection schemes with the expectation that they can be
managed more cost-effectively (Ramm, 2011).
2. Stimulator: The government can also play an important role in stimulating market
development by encouraging public and private insurers and delivery channels
to reach under-served segments. In fact, several regulators have a market
development mandate in addition to their supervisory function. They may
implement that mandate by stimulating the demand side, through premium
subsidies, consumer education and awareness-raising activities. For example, in