MICROCAPITAL BRIEF: Microinsurance Innovation Facility: Market Reaches 500m People, 60% in India

According to a report titled “Protecting the Poor a Microinsurance Compendium” that was recently published by the Microinsurance Innovation Facility, an initiative of the UN’s International Labor Organization (ILO) and Munich Re, a German reinsurance company, the total market for microinsurance reached 500 million people with the largest shares in India and China.

According to the report, “the number of people covered by microinsurance rose from 78 million in 2007 to 135 million in 2009, reaching nearly 500 million today [2].” The growth of microinsurance was mainly driven by Asia, with India having 60 percent of the insured in the world. Africa and Latin America have five and 15 percent, respectively.

The market share of Asia is attributed to the large and dense population, effective distribution channels, interest from both public and private insurers and other government support. Mr Craig Churchill, team leader of ILO’s Microinsurance Innovation Facility, said future efforts should “focus on increasing effectiveness so that insurance products can successfully reduce vulnerability [1].”

Munich Re has EUR 236.4 billion (USD 313 billion) in total assets as of December 31, 2010. The Microinsurance Innovation Facility was launched in 2008 with a USD 34 million grant from the US-based Bill and Melinda Gates Foundation with the goal of increasing the availability of microinsurance to low-income families in developing countries.

By Amira Berrada, Research Associate

About the Microinsurance Innovation Facility: Launched in 2008 with a USD 34 million grant from the US-based 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 and is located in Geneva, Switzerland.

About Munich Re: Munich Re is a reinsurance company established in 1880 in Munich, Germany. It provides insurance advisory services, reinsurance, primary insurance and health insurance. Its assets are managed by Munich Ergo Asset Management (MEAG). As of December 31, 2010, Munich Re had EUR 236.4 billion (USD 313 billion) in total assets.

Sources and Additional Resources:

[1] Ghana Business News: “Africa has 5% market share as world micro insurance reaches 500 million persons – ILO”
http://www.ghanabusinessnews.com/2012/04/13/africa-has-5-market-share-as

[2] “Protecting the Poor a Microinsurance Compendium” http://www.munichre-foundation.org/NR/rdonlyres/52FA02DB-B6A4-4DEB-8149-

MicroCapital.org story, November 9, 2011, “MICROFINANCE EVENT: The Business Viability of Microinsurance, Webinar, November 24, 2011, Organized by the Microinsurance Innovation Facility of the United Nations’ International Labor Organization” https://www.microcapital.org/microfinance-event-the-business-viability-of

MicroCapital.org story, October 7, 2010, “SPECIAL FEATURE: Munich Re Foundation, Microinsurance Network Interview Howard Bolnick, Chair of International Actuarial Association Working Group on Microinsurance” https://www.microcapital.org/special-feature-munich-re-foundation-microin

MicroCapital Universe Profile for Microinsurance Innovation Facility: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microinsurance+Innovation+Facility+%28MIF%29

MicroCapital Universe Profile for Munich Re: https://www.microcapital.org/microfinanceuniverse/tiki-editpage.php?page=

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Amira joined MicroCapital while working at Export Development Canada (EDC) as a Credit Insurance Underwriter. Amira holds a Bachelor degree in International Business and Finance from Concordia University in Montreal. While completing her bachelor degree, Amira spent a semester in France and upon graduation, three months in India working with non-governmental agencies, political and spiritual groups for various socioeconomic initiatives such as the advancement of women. While travelling to different cities and rural areas in India, Amira was touched by the poverty she witnessed and was dedicated to finding a way to intertwine her business interests with her passion for development. She hopes this internship in microfinance will provide the framework to integrate an element of development into her professional career as well as positively contribute to the field of microfinance. Amira speaks English, French, and Spanish fluently and has conversational knowledge in Portuguese and Arabic. In her spare time, she enjoys reading, trying new restaurants such as molecular gastronomy, restaurants made out of ice and Nicaraguan meals wrapped in banana leaves. Most of all, she loves to travel with loved ones.