Unpredictable events, such as illness, loss of livestock, death or accidental disability, bring devastating consequences to poor households, particularly in developing countries. Worse, entire communities face upheaval from droughts, hurricanes, and earthquakes. Such risks call for some kind of safety net or other social protection mechanism. While public funds will always be necessary to help the most indigent, market-based solutions are an efficient and fiscally attractive option to meet the risk management demands of poor households and small enterprises.
Microinsurance is one such instrument for social protection. Of the estimated four billion people worldwide who live on less than $2 a day, fewer than 10 million currently have access to formal insurance from a regulated financial institution. Current work in the area of microinsurance is largely focused on delivering insurance to the poor by partnering with microfinance institutions. This approach is not sufficient, as millions of poor people in rural and other areas live far from a microfinance institution. Formal financial institutions, such as commercial banks and insurance companies, and other institutions, like community-based organizations, can also deliver and service insurance products effectively and profitably.
Microinsurance-style products have a long history of providing social insurance in industrial countries, but their reach in the developing world remains limited. This reading list explores the challenges of providing microinsurance to all the world’s poor.
This collection of resources covers the following areas in microinsurance:
- the case for microinsurance;
- how institutions and regulation can improve access to insurance;
- delivery mechanisms that lower costs;
- design, pricing, and reinsurance of insurance products; and
- taking a market approach to providing insurance.
Source: articlestoreprint.com
