1. Micro-Insurance: A Poverty Reduction Tool
Presented by:
Freda du Toit
Derek Pead
AIO Life Seminar 2008

2. What is micro-insurance?
Protection of low-income
people against specific
perils in exchange for regular
premium payments.
Delivered through a variety of
channels, including non traditional and
community based;
With the aim of increasing the ability to deal with risk

3. Impact of shocks With risk management options Shocks Poverty line
Safety net
Without risk management options

4. The focus of micro-insurance
Risk-management measures
Micro-insurance
Social protection

5. What is social protection?
Social security is
Compensation for absence of income resulting from contingencies e.g. Sickness, injury
Provision of healthcare
Provision of benefits to families with children
Social protection
Provides similar benefits
Social protection = social risk management
Complimentary to government initiatives

6. Micro-insurance products
Poverty alleviation benefit
Long-term savings
Break poverty cycle
Create education opportunities
Long-term insurance
Replace income loss
Credit-linked insurance
Opens funding for development and job creation
Insurance of assets
Manage shock risk
Meeting special needs of women and children
Increase education and health
Health insurance to the poor
Loss of income prevention

7. One size does not fit all
Difference in needs, e.g. Funeral expenses
Different insurance priorities for different market segments, e.g. Cover for spouses
Need to:
Mitigate loss from insurable risks
Help build and protect assets
Broaden social protection

8. Principles for Innovation
Good product service to overcome apprehension for upfront payment
Combine advanced technologies with existing infrastructure
High volume, low margin drive
Process innovation
Collaborative distribution
Challenge conventional wisdom

9. Understanding the demand for micro-insurance
Understand client needs
Differ per country
Product-specific research
Develop products in conjunction with clients
Size of the potential market
The need for volumes

10. Marketing micro-insurance
Marketing message
Protection for the vulnerable
Optimism
Trust
After-sales service
Marketing techniques
Raise awareness
Increase understanding