Insurance Providers Get Support to Invest in Low Income Market
Monday, December 14, 2009
The ILO’s Microinsurance Innovation Facility issued a call for grant proposals to encourage insurance providers to experiment with new products and develop strategic partnerships that will bring affordable insurance products to working poor in developing countries.
To overcome the major challenges associated with health financing for low-income households, the Facility proposes a special emphasis on health microinsurance, but also welcomes applications for projects focusing on high-impact products and innovative distribution channels. Providers that have the potential to provide better insurance products to many low-income people but need their capacity to be to strengthened can also receive support including consulting services, training and exchange visits.
‘The big challenge that microinsurance is grappling with at the moment is health insurance. It is very difficult to provide on a sustainable basis, but it’s the thing that the people want most. Families in developing countries often fall into poverty because of acute illness or a catastrophic event affecting their health and their capacity to generate an income. Studies highlight that many low-income people are willing and able to pay for a safety net that protects their family or business, but they generally cannot access affordable products that would meet their needs. On the supply side, insurance providers often lack the know how to reach this market and need to experiment to develop sustainable business models. The grants are there to support those risk takers, cover their start up costs and harness lessons learnt’ says Craig Churchill, team leader of the ILO’s Microinsurance Innovation Facility
‘[Microinsurance] is a profitable market and we would love to invite as many people as possible to try to make this market as competitive as possible. Honestly, there can’t be enough competition. Competition is going to be what is important to forming a real market at the bottom of the pyramid.’ Added Brandon Mathews, Head of Microinsurance, Zurich Financial Services