What Can First World Countries Learn from Emerging Markets’ Microinsurance Experiences?

In the presentation:

• We’ll define microinsurance, and explain how the need for microinsurance differs from the need for other insurance
• We’ll explain why microinsurance has evolved to a broader term, known as inclusive insurance
• We’ll give a brief overview on what the poverty premium is, and throughout the presentation explain how effective microinsurance can be a useful tool to reduce components of the poverty premium included in insurance.
• We’ll also take you through a number of case studies of microinsurance successes and failures in emerging markets which highlight important factors to consider when developing an effective microinsurance market. 

Some of the factors mentioned in the presentation can be grouped under the following headings:

• Regulation that clearly defines the microinsurance environment and protects policyholders is important.
• Claims need to be paid rapidly
• Product innovation is important where it can reduce cost or introduce efficiencies
• (Prospective) policyholders need to trust the microinsurance providers, and trust that they can provide the products and services promised
• Product design need to be simplified as much as possible
• The distribution channel used to sell microinsurance needs to consider different aspects compared to traditional insurance 

The takeaways from these case studies show that the different factors mentioned above don’t work in isolation but tend to reinforce each other. For microinsurance to be considered effective, all of the abovementioned components need to work together.The insights gained from the developing counties can assist developed nations to adapt their microinsurance strategies reach more of the low-income market segment. Effective microinsurance should increase both the actual and perceived value of product offerings for current and potential clients, thus increasing client retention and policy renewal, and also hopefully growing the market.