MICROFINANCE PUBLICATION ROUND-UP: Maize Insurance in Burkina Faso, Risks to Microfinance in Pakistan, Claims Analysis in Health Microinsurance

“Loan Protection for Maize Farmers in Burkina Faso;” by Barbara Magnoni and Danielle Sobol; published by The MicroInsurance Centre; 2014; 13 pages; available at http://www.microinsurancecentre.org/resources/documents/milk-brief-35-doing-the-math-loan-protection-for-maize-farmers-in-burkina-faso/download.html

This paper presents the findings of a study focusing on the impact of droughts, specifically the costs to maize farmers in Burkina Faso. Historically, variable cash flows have reduced maize farmers’ ability to purchase microinsurance. The authors of this paper examine the role that Allianz, a Germany-based insurance provider, has played in offering microinsurance products to such farmers for losses due to drought and other natural disasters. Although most farmers in the country have diversified their income beyond purely agricultural endeavors, farmers still rely on produce yields for generating cash flows for investing in those other sources of income. Lack of access to insurance limits these farmers’ ability to utilize alternative sources of income when yields are low. The lack of insurance coverage is due in part to a lack of understanding of available products, poorly designed and marketed products, and limited avenues through which farmers can learn more about insurance products. The authors conclude that although there are several significant challenges facing the microinsurance market in the country, there is a great deal of promise that such products and services could prove to be mutually beneficial for both farmers and providers if they were to be more widely introduced and adopted by consumers.

“Risks to Microfinance in Pakistan;” by Ammar Arshad and Ali Basharat; published by Pakistan Microfinance Network; 2014; 48 pages; available at http://www.pmn.org.pk/assets/articles/5534df4dd3c6d2a89037eaf695e127ea.pdf

This paper highlights several risks to the microfinance sector in Pakistan, updating a similar report completed in 2011. The authors highlight challenges including macroeconomic trends that limit stakeholders’ confidence in the industry; increasing competition from international firms; and the growing body of domestic service providers, which has increased competition among providers resulting in lower prices. “Inappropriate” regulations have also become a more prominent concern as government regulations have added reporting and lending restrictions that some providers feel to be overly burdensome. Additionally, a lack of investment funds and diminishing investor confidence in the sector have reduced capital supplies and increased competition among firms to secure funding.

“The Value of Claims Analysis in Health Microinsurance;” by Jeanna Holtz, Tobias Hoffarth and Sapna Desai; published by Impact Insurance; 2014; 20 pages; available at http://www.impactinsurance.org/sites/default/files/mp38_final2.pdf

This paper provides a summary of how analyzing claims data allows health microinsurance (HMI) practitioners to gain insights into how they may improve both their service offerings for clients and the viability of HMI programs. The authors present a comparative analysis of HMI programs run in south Asia by VimoSEWA, Uplift Mutuals and Naya Jeevan. Firstly, the authors argue that providers should establish clear protocols for gathering, processing and interpreting claims data, including systems for securely storing and analyzing such data. Secondly, firms should attempt to identify patterns in claims behavior and adjust services accordingly so as to improve client value and efficiency. Finally, the authors conclude that claims data should be used to adjust product offerings and premiums so as to maximize profitability.

By Makai McClintock, Research Associate

Sources and Additional Resources:

[1] Barbara Magnoni and Danielle Sobol, Loan Protection for Maize Farmers in Burkina Faso

[2] Ammar Arshad and Ali Basharat, Risks to Microfinance in Pakistan

[3] Jeanna Holtz, Tobias Hoffarth and Sapna Desai, The Value of Claims Analysis in Health Microinsurance

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