Microinsurance provides alternative insurance options for low-income individuals compared to conventional insurance. It is delivered through various channels directly to customers and uses innovative products like weekly premium payments and payouts for life events beyond death. The story of Jorina Bibi shows how microinsurance helped her rebuild her life and business after her husband's death, while Budi's story without insurance ended in poverty and human trafficking. Microinsurance helps vulnerable populations better withstand financial shocks and maintain their economic position.

1. MicroInsurance
Not insurance as you know it!
Gabriel Flores
Dr. Phyllis SantaMaria

2. Warm up! Walk around and introduce
yourself to three other people
• Name
• What you do
• Why are you here tonight?
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3. After tonight’s session, you will be able to...
• Distinguish the benefits of microinsurance
and how it differs from conventional insurance
• Describe how microinsurance helps people
maintain and possibly improve their position
on the economic pyramid
• Select a way to get involved with
microinsurance
3

4. What is insurance?
Lloyd’s
of
London
4

5. What is insurance?
• House • Unemployment:
• Life Gov’t
• Car & Consumer • Disaster: Gov’t
Goods • Security: Gov’t &
• Health: NHS & Private
Private • Injury: Corporate
• Pensions: Gov’t & • Professional:
Private Individuals
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6. What are your opinions about insurance?
– [insert photo of Lloyd’s building]
Inside
Lloyd’s
of
London
(BBC
photo)
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7. Some opinions about insurance…
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8. Blind people describing an
elephant…
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9. Catheryn’s story: UK vs US
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10. Different views of microinsurance
Financial
analysts
Donors
Insu
Poor
rers
peo
Academics
ple
Microfinance
ins5tu5ons
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11. Budi, a Borrower
• A loan, NO insurance,
1998
NO savings
• 43, two sons, husband
died
• NO assets, home, job,
money, help from in-
laws
• Moved to Dhaka,
Bangladesh, seeking
job and shelter
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12. Jorina Bibi, a Borrower
with Insurance
• A loan, NO savings
• Insurance with Delta Life
on her husband’s life 1998
• 29, widowed, 3 young
children
• Her in-laws demanded
the life insurance money
• She refused, got thrown
out with her three
children
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13. 2008: Budi and her children
• She and her two sons
begged, scavenged
food and slept on 1998
pavements in Dhaka
• US$ 0.50 a day
• We lost contact
– Budi disappeared –
probably victim of a human
trafficking gang
– Elder son, then 16, in jail
for robbery
– Younger son, then 13,
breaking bricks at a Photo by courtesy of Mike Bedner, Alberta, Canada; Rotary
construction site GSE Member on visit to Bangladesh
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14. 2008: Jorina Bibi, a Delta Life
Policyholder
• With help of friends
and an NGO she 2008
moved into a home
for destitute women
• With part of £80 from
her husband’s life
insurance
– rented some land
– built a hut to live in
– set up a poultry
business A Delta Life Microinsurance beneficiary and her poultry farm
Photo by Gono-Grameen Bima Manager, Delta Life
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15. 2008: Jorina Bibi’s and her
children’s success
• Today a micro entrepreneur
– employs 4 people
– earns Taka 8,000 (£64) per
month
• Her children are successful
– Daughter got a teaching degree
and teaches at a local school
– Both her sons finished college
and joined her business
Jorina Bibi’s daughter Nasreen (1st from left), a teacher, with some of her colleagues
Photo by Gono-Grameen Bima Manager, Delta Life
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16. How does microinsurance help
cushion the impact of shocks?
Wealthy
Economic Levels
Non-poor
Vulnerable non-poor
Moderate poor
Extreme poor
Destitute
Loan Cycles and Impact of Losses
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17. The 4 main microinsurance
products
Life
Insurance:
oFen
given
by
MFIs
Health
Insurance:
needs
health
care
providers
Livelihood
Insurance:
machinery
Crop
and
livestock
Insurance:
needs
sophisMcated
data
such
as
50
yrs’
rainfall

18. How does microinsurance differ?
Fast
Needs
based
Groups
Response
On
your
EducaMon
CollaboraMon
doorstep
MARKET
SIZE:
4
BILLION
PEOPLE
GLOBALLY
(2-­‐3
BILLION
POLICIES)

19. Delivery channels
Insurance
companies
Bank,
Post
office
Employers Hire
Charge
service
providers
Retailers
Mutuals
Suppliers
Low Cooperatives
Income
People Labour unions
On-line & ATM
Cell
phones
MFIs
Smart
cards
NGOs
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20. Life insurance with flexibility
Amparar Policy by LA
EQUIDAD, Colombia for their
cooperative members only
• Monthly premium US$ 1.00;
basic coverage US$ 1,250.00
• 50% pay out for treatment in
case policy- holder contracts
incurable disease while insured
• After policyholder’s death for
two years
– Child’s education expenses
– Medical expenses for
dependents
– Monthly food vouchers
– Utility bills
Beneficiaries of a La Equidad AMPARAR policy by
courtesy of La Equidad
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21. Indexed rainfall insurance
BASIX- India
• Collaboration: World Bank,
IFC, and ICICI Lombard
Bank,
July 2003: benefits indexed to
rainfall
• 3rd Year – 2005
– 23,080 policyholders
• 5th year – 2007
– 37,685 policies sold
• 8th year – 2010
– 97,700 policyholders
NOW IN 7 STATES in INDIA, PRODUCTS
INCREASED
Farmer in India waiting for rain by courtesy of
BASIX
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22. Comprehensive healthcare with
ID card
Microcare - Uganda
• Provides in-patient and out-
patient treatment and
prescription medicine
• Several thousand policy
holders
• Started as a NGO; now a
licensed Uganda insurance
company
• A Microcare desk at a participating
hospital has a third party
administrator to reduce moral hazard
by beneficiaries or the clinic
Photo courtesy of MIRT
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23. Integrated insurance package
Vimo SEWA co-op, India
• Three packages: death,
sickness, loss of assets
• Annual premiums or fixed
deposits
• Special benefits for fixed
deposit members
– Maternity $6.90
– Dentures $13.80
– Hearing aid $23.00
Marketing of SEWA through outdoor folk
theatre. Photo courtesy of MIRT
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24. Key challenges
Clients Insurance products and
• Negative attitude industry
• Don’t see the value • Little knowledge of the
• Low and irregular income market
• Low premiums
• High transaction costs
Delivery channels
• Clients’ high expectations
• Poor infrastructure
• Low insurance competence • Lack of data for pricing
• Low retention rate
• Slow claims handling
• Few health care providers
to link with health products
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25. Cautions about microinsurance!
• NOT a ‘magic bullet’
• NOT the right risk
mgmt solution for all
poor people
• Microfinance
institutions
– Don’t have all skills
required
– Must assess expenses
and risks before
offering Microinsurance
– MUST NEVER act as
insurers unless they
have huge resources
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26. What new things have you encountered
tonight?
• What are the benefits of microinsurance?
• How does it differ from conventional
insurance?
• How does microinsurance help people
maintain and possibly improve their position
on the economic pyramid?
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27. ARE YOU READY TO TAKE ACTION?
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28. How to get involved
• Tweet your insights to @MicrofinanceWoB (We’ll Tweet
back!)
• Sign up to our mailing list on your Smartphone
www.microfinancewithoutborders.com and get copies of
tonight’s presentation
• Book for our free event: Practical Microfinance in Action!
Tue 13 Nov, 6.30-9 pm at Allen & Overy
• Enquire about MWB’s
– Practical Microinsurance Consultancy Courses
– Consultancy support for Insurers, Regulators and Microfinance
Institutions
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29. Contact Information
• Mosleh Ahmed
– info@microfinancewithoutborders.com
• Dr Phyllis SantaMaria
– Mobile: +44 7715 004 303
– Landline: +44 207 839 0844
– Email: phyllis@microfinancewithoutborders.com
• Gabriel Flores
– Mobile: +44 7834 528 966
– Email: gabriel@microfinancewithoutborders.com
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