General Insurance Article - An Exciting Time to Consider the Microinsurance Market


Microinsurance is generally designed for low-income businesses and individuals who aren’t typically covered by traditional insurance. It is usually sold at low premiums and low coverage limits / caps.

 Claude PenlandBy Claude Penland, Actuary

 Some insurance analysts have said that microinsurance is an untapped market for emerging economies, especially in India, Bangladesh, China, the Philippines and many parts of Africa. Latin America should also see growth. In fact, microinsurance has a possible customer base of around 4 billion people. Interestingly, 200-300 years ago, sickness benefit societies, friendly societies and fraternal insurance plans were implemented in the United States and in Europe. These plans were essentially microinsurance, too.

 Swiss Re reports that the microinsurance market has an eventual potential annual premium of up to $40 billion.
 Credit life is presently a leading microinsurance product. Going forward, some expect other insurance products that are found to be necessary in the developed world – for example, health and property insurance – to develop a microinsurance following as well.
  

 Barriers to microinsurance growth include inadequate local regulation. Actuaries can find it difficult to price products with a lack of appropriate actuarial risk and exposure data. Insurance product distribution claims handling and underdeveloped microfinance sectors are also high hurdles to jump. And, finally, cultural acceptance and education can be significant barriers.
  

 Some insurers and governments are considering private-public partnerships to help develop the microinsurance sector. Reinsurance broker Guy Carpenter has even recommended microinsurance to reinsurers as a growing market where they could devote some excess capital.

 It is indeed an exciting time to consider the microinsurance market.
  

Back to Index


Similar News to this Story

Cyber Insurance is next big product for commercial brokers
UK brokers believe that cyber insurance is the new or emerging commercial insurance product with the most growth potential. Significantly low cyber in
Davies names Richard Barke as CEO of Insurance Solutions
Davies, the leading specialist professional services and technology firm serving insurance and highly regulated markets, has announced the promotion o
Incident response planning is a key cybersecurity control
Despite being focused on post-breach activities, cyber incident response planning has emerged as a key cybersecurity control in reducing an organizati

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.