MR Microinsurance_2012_03_29.indd - International Labour ...

38 Emerging issues
Furthermore, even in States where microinsurance is already growing, it may
expand further if policymakers promote subsidies and expand their involvement
in PPPs to achieve public policy objectives with limited budgets. To increase
their impact, policymakers can also do more to support knowledge management
to make good practices widely available, and promote data standardization, collection
and aggregation so that pricing is based on relevant experience. Th ey can
also advance customer protection without undermining innovation, and encourage
consumer education so that the public understand what they are being
off ered, appreciate how it can help them, and know where to turn if they are not
satisfi ed with the results.
Figure 1.6 Th e demonstration eff ect chain of microinsurance market development
Policymakers,
supervisors
Learn from the
ideas, successes
and failures of
policymakers in
other countries
Create an
enabling environment
for …
Insurers,
distribution
channels
Emulate, adapt
and improve
upon the innovations
of other
microinsurers
Provide
valuable products
to …
Amplifi ed and accelerated by knowledge management
Policyholders
Begin believing
that insurance
works when the
claims start being
paid quickly
As for insurers and delivery channels, in some markets microinsurance will
become increasingly competitive, especially given the broad emergence of more
eff ective payment systems. As enrolment and premium collection becomes easier
and cheaper, the potential for insurers will expand dramatically. Th is expansion
should lead to better pricing and a broader range of voluntary products as insurers
link with new collaborators such as dairies and agricultural suppliers, pharmaceutical
companies and healthcare providers, telecommunications companies
and retailers. Yet with growth and visibility comes responsibility. Operating
under the radar meant that microinsurance providers and promoters were
allowed signifi cant latitude. Maturity is making many take a closer look at the
results to carefully consider the consumer protection implications.
A critical challenge in building a market is on the demand side, creating conditions
that encourage low-income households to turn to insurance naturally as
part of their risk management toolkit. In environments where microinsurance is
prevalent, and providers are cultivating the trust of that market through effi cient