MICROCAPITAL BRIEF: Munich Re Foundation, International Labour Organization (ILO) Announce Microinsurance Has Potential to Reach 3 Billion People

Munich Re Foundation, a nonprofit founded by German reinsurer Munich Re, and the International Labour Organization (ILO), an arm of the United Nations promoting fair work conditions, announced in advance of a microinsurance conference in Manila, Philippines, that unnamed studies indicate microinsurance has the potential to reach three billion people.

Microinsurance – insurance coverage for the poor including health, property, life and more recently, extreme weather insurance – already covers 140 million people mostly in Africa and Asia. Craig Churchill, of the Microinsurance Network, a member-based network of organizations promoting good practices in the microinsurance industry, said the Philippines, India and Indonesia offer the biggest market opportunities due to their large populations, regulatory frameworks, strong co-operative systems and potential risks from extreme weather and disasters such as earthquake and volcanoes.

Mr Churchill claims that in the Philippines alone there is a market of nearly 35 million people willing to pay a premium of PHP 20 – PHP 30 (USD 0.46 – USD 0.68) per week for coverage of PHP 120,000 (USD 2,800). The government has set a maximum daily premium of PHP 20 (USD 0.46), 5 percent of the daily minimum wage in Manila, for life and health insurance products offering payouts of up to PHP 200,000 (USD 4,560) [1].

By John Howard-Smith, Research Associate

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 2009, Munich Re has an investment portfolio of EUR 182 billion (USD 256 billion), return on equity (ROE) of 11.8 percent and return on assets (ROA) of 4.3 percent.

About International Labour Organization: The International Labour Organization (ILO), founded in 1919, is an agency of the United Nations, a humanitarian organization promoting peace and better living standards, 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 Microinsurance Network: The Microinsurance Network was first established in 2002 as the CGAP Working Group on Microinsurance. The organization aims to promote the development of good-value insurance products for low-income populations by providing a platform for information sharing and stakeholder coordination through its 52 member organizations. There is no financial information available on the organization.

[1] Reuters: “Microinsurance sees growth opportunities in India, Indonesia”, http://in.reuters.com/article/idINIndia-52774220101109

MicroCapital’s Microfinance Universe profile: Munich Re, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Munich+Re

MicroCapital’s Microfinance Universe profile: International Labour Organization, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Labour+Organization+(ILO)

MicroCapital’s Microfinance Universe profile: Microinsurance Network, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+Microinsurance+Network

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