Microinsurance:  Links to Occupational Safety & Health
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Microinsurance: Links to Occupational Safety & Health. Workshop for OSH through provision of MI, MF & Banking Services Cairo, Egypt – December 2009 Jeanna Holtz The Microinsurance Innovation Facility International Labour Organization, Geneva. Overview of Microinsurance Presentation.

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Microinsurance links to occupational safety health

Microinsurance: Links to Occupational Safety & Health

Workshop for OSH through provision of MI, MF & Banking Services

Cairo, Egypt – December 2009

Jeanna Holtz

The Microinsurance Innovation Facility

International Labour Organization, Geneva


Overview of microinsurance presentation

Overview of Microinsurance Presentation

  • What is microinsurance?

  • Evolution & trends

  • Product development

  • Closing thoughts-way forward


Microinsurance is

Microinsurance is…

Definition

“…a mechanism to protect low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved”

Microinsuranceis not…

  • Regular insurance products with smaller sums insured and premiums

  • Small insurance companies

  • Just another product offered by MFIs

  • Savings, credit, risk prevention


Characteristics of the insurable poor

Characteristics of the insurable poor

  • Often work in the informal economy

  • Irregular cash flows

  • Manage risks through myriad of informal means, including social networks

  • Limited familiarity with formal insurance

  • May not trust insurance companies

  • Vulnerable to risks…

Valuable, effective MI considers these characteristics


Microinsurance links to occupational safety health

Micro vs. Conventional Insurance

Adapt to needs of target market


Microinsurance roots

Microinsurance roots

Micro-insurance

Investor interest

Popular insurance by cooperatives

Expansion of Microfinance

Business opportunity by insurers

Extension of social protection


Microinsurance trends

Microinsurance trends

  • MI emerging out of the shadow of microfinance: business and social impact

  • Greater variety of distribution channels

  • Growing interest from policymakers, regulators and insurance companies

  • Increased focus by investors; some evaluate social dimensions

  • Product innovations that provide better coverage to more low-income people

  • Increasing experimentation with consumer education on risk management and insurance


2009 survey results

2009 Survey results

  • 14.7 million people in Africa with microinsurance

  • USD 257 million in premiums received in 2008

  • 2.6% of the population living under USD 2 per day


Microinsurance product spectrum

Microinsurance product spectrum

Credit life

Term life/Personal accident

Savings life

Property insurance

Endowment life

Agriculture

Health insurance

Success

Difficulty & demand

3. Products

Products in greatest demand are least available


Getting started

Getting Started

  • Start simple:

    • Life insurance, linked to loans, easy point of entry

    • Also: accident, disability

  • Potential add-ons (later): income replacement, critical illness, hospitalisation cash…

    • Example: Microfund for Women, Jordan

      • Caregiver product: covers certain costs during illness episode


Considerations to develop microinsurance

Considerations to develop Microinsurance

  • Partnership with insurer, other stakeholders

  • Eligibility

    • Mandatory or voluntary

  • Piggyback or standalone

  • Premium collection timing and mechanism

  • Benefit design

  • Claims payments

  • Client & employer education

  • Risk management and controls

    • Important for accident cover


Checklist for workplace microinsurance

Checklist for workplace microinsurance

  • Medium to large organizations (volume); growing

  • Accidents and deaths are frequent, volatile

  • Win-win for insurer/channel, employer and employees

  • Efficient distribution (easy access)

  • Low transaction costs (enrolment, premium collection, claims)

  • Simple, valued product


Benefits of microinsurance microfinance decent work

Benefits of Microinsurance, Microfinance & Decent Work:

Closing Thoughts

SOCIAL

COMMERICIAL

  • Better jobs, safer workplace

  • Protection when accidents occur

  • Employee Loyalty

  • Socially responsible

  • Improved access to financial services

  • Higher loan repayment

  • Profitable business venture

  • Increased productivity

  • Lower absenteeism

  • Employee retention

  • Attract capital


Closing thoughts cont

Closing Thoughts, cont.

Successful products:

Overcome the wariness of customers

Adapt to the socio-economic situation of the poor

Create an insurance culture

Consider social dimensions

Scale up, by:

Start small: Build client interest and trust; organizational competency

Leverage existing distribution channels such as MFIs (efficiency!)

Build on lessons learned

Innovate; add value to products

Manage Risks

Increase

Income

Build

Assets

Risks: Accidents, Illness, Death, Property Loss, Disasters…

Innovation will drive development


Thank you

Thank you!

Jeanna Holtz

For more information:

www.ilo.org/microinsurance

or email:

[email protected]

Tel +41 22 799 66 84


Microinsurance links to occupational safety health

Extra slides


Learning about microinsurance

Learning about microinsurance

  • Conducted 24 case studies, which draw lessons from 40 microinsurance providers, including risk carriers and delivery channels, primarily in Africa, Asia and Latin America

  • Case studies are available on www.microinsurancefocus.org

  • Published “Protecting the poor: A microinsurance compendium” with Munich Re Foundation


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