Microinsurance

Microinsurance designates low-premium, simplified-cover insurance products designed for low-income populations generally excluded from traditional insurance, notably in developing countries. It covers essential needs: health, death, accidents, crops, livestock, sometimes property. Its business model rests on volume, product simplicity and the control of distribution and management costs, which are the main challenge: indemnifying modest amounts for a multitude of insureds requires very efficient channels, often supported by mobile telephony, cooperative networks or microfinance institutions. Microinsurance is part of financial inclusion and the reduction of the protection gap in emerging economies. It intersects climate index insurance for the protection of smallholder farmers and takaful in the relevant markets. For insurers, it represents a long-term growth market and a social responsibility issue, provided a sustainable economic balance is found.