1. World Bank Group Economic Rationale for Microinsurance The role of the World Bank Olivier Mahul Program manager Insurance for the Poor World Bank

2. World Bank Group Insurance for Poor: Historical context Fatres: Roman burial insurance societies Friendly Societies in the late middle ages Non-governmental social insurance arrangements UK: 5 million people covered by 26,000 friendly societies in the early 20 th century Similar arrangements in Europe and North America

3. World Bank Group Two steps forward, one step back Trends in household poverty in 35 North Indian Villages (poor households, %) Source: Anirudh Krishna (2004); “Escaping Poverty and Becoming Poor: Who Gains, Who Loses, and Why?”; World Development Vol. 32, No. 1, pp. 121–136, 2004.

4. World Bank Group Reasons for descent into poverty

5. World Bank Group Insurance for the poor does not really work as an individual product

6. World Bank Group Moving towards a public-private partnership The public sector may not be the best manager of financial services… …But insurance for the poor is unlikely to be scaled up without government support Public-private partnership Delivery of agriculture and health services to the working poor Premium subsidies to those below the poverty line

7. World Bank Group Is health insurance an oxymoron? Self funded out of current income headache, colds etc Community funded outpatient and secondary care - malaria Catastrophic events – referral hospital – congestive heart disease Community Based Health Insurance Program in Rwanda

8. World Bank Group Life insurance So-called life insurance being issued by some microfinance institutions is Personal Accident Low probability of payout Confirmation of death is easy Profitable for both the MFI and the insurer Is it a good deal for the insured? Full life cover can be exposed to extreme adverse selection and fraud Funeral insurance is a fundamental need for the poor

9. World Bank Group The WB role in insurance for the poor Developing business models Microeconomics of providing insurance and risk related services to the working poor households Promoting market development programs Developing market-based risk funding systems that can be scaled up Threefold approach Investments in building market infrastructure Technical assistance in developing new products Integration into social protection approach

10. World Bank Group The WB role in insurance for the poor WB-FPDSN Insurance for the Poor Social protection policy Market models Planners Searchers