MR Microinsurance_2012_03_29.indd - International Labour ...

60 Emerging issues
pre-emptively encourage households to reallocate money they may have saved
for such emergencies to other more profitable ends ex-ante, before any
problems occur. Similarly, health microinsurance can improve policyholders’
health through increased access to care, which can additionally reduce local
disease burdens and thus improve the health of nearby uninsured people too.
As impact is multi- faceted and manifests itself in different ways, we need to be
aware of each intervention’s myriad potential effects and their relationships to
each other.
3.1.1 Why is impact (and evaluating impact) important?
Impact defines the value of microinsurance for clients and by extension
its worth to microinsurers. In the absence of impact (or the degree of impact
that customers expect given the premiums they pay), people will neither
purchase nor renew policies and the market will fail. Impact is therefore
crucial to achieving profitability, as well as important poverty-alleviation
objectives for commercial- and development-oriented microinsurance providers.
Impact analysis should also be discussed within the broader client
value framework presented in Chapter 15, creating an iterative cycle whereby
the analysis of product impact feeds back naturally into product and
process design. A process of impact evaluation is designed to allow microinsurance
products to be developed, refined and improved over time. In this
respect, impact assessments complement other, often less rigorous, market
research and client satisfaction studies that provide information for microinsurance
product development. While the latter studies focus on improving
impact, the impact assessments attempt to prove the impact of microinsurance.
Different stakeholders assess impact for a variety of reasons. Donors do so
to gauge the success of funded projects and determine which prospective
interventions to support. By contrast, governments evaluate impact to assist
them in defining national policy and specific regulations. Investors want to
ensure that their microinsurance investments are well placed to capture the
market by providing value to clients. Lastly, microinsurers perform impact
assessments to evaluate and improve their products’ effectiveness. Taken
together, impact and its evaluation are key to the successful development of
microinsurance.