MICROCAPITAL BRIEF: United Nations’ International Labour Office, World Bank Group (WBG) to Provide Index Microinsurance in Developing Countries in Africa, Asia

The International Labour Office (ILO), an agency of the United Nations
that deals with labour standards, and the World Bank Group (WBG), a
group of five multilateral organizations that invest in developing
countries, reportedly have entered into a three-year partnership with
the aim of providing index microinsurance products in Africa and Asia
through ILO’s Microinsurance Innovation Facility (MIF), which provides grants to organizations to develop microinsurance products, and WBG’s Global Index Insurance Facility (GIIF), a trust fund that supports disaster and weather index insurance markets.  Gilles Galludec of GIIF reportedly explained that “index insurance is particularly relevant in serving as a hedge against climate-related risks” and that “accurate data and innovative frameworks to sufficiently address local market conditions” will be needed in Asia and the Pacific, the Caribbean and Sub-Saharan Africa, and therefore the “partnership with the Facility will enable GIIF’s grantees and partners from the private sector to share their knowledge and develop best practices within index insurance.”

According to a statement attributed to Craig Churchill, the Team Leader of MIF, the index insurance products are for “low-income people” to “increase their resilience to risk, enabling them to adopt improved production processes to help break the poverty cycle of low investment and low returns.”

As of December 2013, WBG had commitments of USD 52.6 billion in loans, grants, equity investments and guarantees. As of 2014, WBG has 10,000 employees and operations in approximately 120 countries. As of December 2012, ILO reports total assets of 1.65 billion.

By Sarah Luo, Research Associate

About MicroInsurance Innovation Facility (MIF)

Launched in 2008 with a USD 34 million grant from the Bill & Melinda Gates Foundation, the Microinsurance Innovation Facility (MIF) is housed at the International Labour Organization’s (ILO’s) Social Finance Programme. MIF’s goal is to increase the availability of insurance for low-income families in developing countries to help them overcome poverty. MIF provides grants to help organizations develop innovative microinsurance products, with an emphasis on agriculture, health, life and property insurance. MIF also provides technical assistance and advice. ILO is an agency of the United Nations.

About International Labor Organization (ILO)

The International Labor Organization is an agency of the United Nations (UN) whose objective is to advance opportunities for men and women to obtain decent and productive work in conditions of freedom, equity, security and human dignity. Its founding mission is that labor peace is critical to prosperity.

About The World Bank Group (WBG)

Headquartered in the US, the World Bank Group (WBG) is a multilateral development organization whose mission is to improve living standards for people in developing countries. Owned by 188 member countries, WBG encompasses the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); the International Centre for Settlement of Investment Disputes (ICSID) and the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). WBG has 10,000 employees and operations in approximately 120 countries as of 2014. WBG had commitments of USD 52.6 billion in loans, grants, equity investments and guarantees as of December 2013.

Microinsurance Innovation Facility: http://www.microinsurancefacility.org/news/2014/july/enhance-access-index-insurance

MicroCapital, May 18, 2010: A New Study Published by the Microinsurance Innovation Facility of the International Labour Office Indicates 2.1% of the Potential African Market Is Covered by Insurance

MicroCapital, November 8, 2011: The Business Viability of Microinsurance, Webinar, November 24, 2011, Organized by the Microinsurance Innovation Facility of the United Nations’ International Labour Organization

MicroCapital, September 10, 2011:  International Labour Organization (ILO) Backs Crop, Life, Property Microinsurance Scheme in Bolivia

MicroCapital, February 15, 2011: Study from MicroInsurance Innovation Facility (MIF) of the International Labor Organization (ILO) Supports Utility of Health Microinsurance in Rural Senegal

MicroCapital Universe: International Labor Organization (ILO)

MicroCapital Universe: Microfinance Innovation Facility (MIF)

MicroCapital Universe Profile: The World Bank Group (WBG)

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