By Dirk Reinhard , Vice Chairman, Munich Re Foundation and Member of the Executive Committee of the Microinsurance Network
The Microinsurance Network will soon become a teenager. After nearly a decade of work, we can be proud of what this group has achieved. It has facilitated the creation of organizations such as the ILO’s Microinsurance Innovation Facility and the Access to Insurance Initiative. Both these organizations have advanced research into and the development of microinsurance pilot projects and the bases for a sound regulatory environment. The 7th International Microinsurance Conference to be held in Rio de Janeiro from 8 to 10 November 2011, hosted jointly by the Microinsurance Network and the Munich Re Foundation, will attract five times more participants than the initial conference in 2005.
Microinsurance has brought about change in the industry. Companies such as Zurich, Swiss Re and Allianz have created teams to find ways to enter the low-income market. MicroEnsure now serves millions of clients. Leapfrog’s success in attracting substantial capital to be invested in microinsurance shows that access to capital is not the key issue.
Yet have we seen the big breakthrough in developing profitable microinsurance solutions that provide good client value for large numbers of clients? Perhaps not. Should we be disappointed? Clearly not!
The development of microinsurance cannot take place independently of economic development, improved healthcare and education, and political stability. Since the lack of local experts seems to be a major obstacle to development, the insurance industry needs to invest in the education and training of such experts. What the developed world took several hundred years to accomplish cannot be replicated within a decade even given all the new technology and knowledge that is now available. What is needed, moreover, are strategic, country-wide approaches such as the one adopted by the Philippines, in which the insurance industry, government, donors and organizations representing the clients join forces. The challenges are often too great to be met by individual players alone, and the now mature Microinsurance Network will continue its work to catalyse cooperation throughout the industry.
Source : Innovation Flash – The Newsletter of the ILO’s Microinsurance Innovation Facility
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