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“As microfinance has shown that the poor are bankable, microinsurance is showing that they are insurable as well.”

Insurance is rapidly gaining popularity as an additional financial tool to help people

The experimentation of the last ten years

living with poverty coping with the risks and vulnerabilities they face in everyday live.

has seen failures as much as success

Saving is the traditional way to deal with such risks whereas borrowing comes in to

stories. Careful analysis of both has resulted

strengthen income earning capacity or stabilise family incomes. Insurance extends the

in a body of literature, manualsand guide-

coping capacity to a next level of leverage as it increases the scope of risk coverage.

lines that carries the sector further. Clear don’ts have been identified, while do’s

The growing popularity of insurance as an additional coping tool can be explained in

are gaining wide acceptance across the

various ways. Established insurance providers are continuously looking for expansion

sector. This contributes to the develop-

of their activities and have made inroads into the lower segments of the market.

ment of a policy framework that, though

Development organisations are looking for ways and means to support their target

still being work in progress, already

groups in strengthening their coping capacities. Microfinance institutions develop

shows potential for bringing various

new financial products and services to meet increasing client demand, and donor

actors and parties together to enhance

agencies are supporting policy and practice changes towards a more inclusive

insurance delivery to the poor in a rather

approach of financial service delivery to contribute to the realisation of the Millennium

substantial, if not spectacular way.

Development Goals. The single most crucial element of this Moreover, in the last ten years a good deal of pioneering and experimentation in

policy framework is the recognition

the field of microinsurance has been conducted, which resulted in a growing confidence

that successful microinsurance must be

that insuring poor people is actually possible. As microfinance has shown that

demand based. Demand for insurance

the poor are bankable, microinsurance is showing that they are insurable as well.

should come from the clients, the poor; should not be pushed upon them by

The same experience is also showing that they are not insurable just like that. Risk

insurance companies, NGOs, MFIs or

levels are high and risks are difficult to assess. The longer term horizon of insurance

funding agencies. Acceleration of the

benefits may not always be easy to digest or appreciate by clients living in a day-to-

sector, in other words, must be gene-

day survival environment. Exclusion of high-risk clients is part and parcel of the

rated by the clients themselves if it is

insurance system, which may undercut solidarity based development approaches.

to succeed.

And some clients tend to benefit more from insurance schemes than others, though all have to pool the same resources to keep the system going.


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Microinsurance brochure  

Microinsurance brochure

Microinsurance brochure  

Microinsurance brochure