Microinsurance is specifically designed to cater to the low income and informal sectors. Mobile phone and microinsurance the ilos impact insurance. Mobile microinsurance is broadly defined as any microinsurance product that leverages mobile channels. The nic established microinsurance market conduct rules in 20, and has taken a proportionate approach to regulation, in particular towards distribution. A microinsurance plan provides protection to individuals who have little savings and is tailored specifically for. Microinsurance does not refer to the size of the insurer. Heckman sample selection, instrumental variable and treatment effects. Although the microinsurance market in ghana is developing rapidly, it is still at the infant stage of development and is therefore confronted with an array of challenges which need to be addressed on a consistent basis to ensure the success of microinsurance in the country. The impact of microinsurance on household welfare in ghana. Ghana introduced free primary and juniorhigh education in 1995, but only in 2017 did the. Government financial institutions, on the other hand, are allowed to lend by providing wholesale funds to private financial institutions using marketbased interest rates.
Riskonly it is proposed that microinsurance products will only include risk benefits with no surrender value. The number of risks covered by microinsurance has more than doubled since 2009. Free online study resources for all preliminary actuarial examinations. The latest installment of the hfg projects mobile money newsletter highlights mobile microinsurance in the context of health. This reduces the cost of providing microinsurance and increases customer loyalty. In microinsurance, it is important that claims are processed quickly and transparently. Based on the analysis of the minsurance sector in ghana, we identi. The summary of the three estimations is that microinsurance improves insured households consumption smoothing and food security by eliminating undernutrition and malnourishing actions such as reduction in food intake. Jun 15, 20 the purpose of this article is to structure the extant knowledge on the determinants of microinsurance demand and to discuss unresolved questions that deserve future research. Demand for microinsurance in rural ghana december 2008 1 1. Approximately 60% of lives as of 2014 are insured by microinsurance products delivered via mobile insurance. The south african microinsurance regulatory framework policy document is the final outcome of the consultative process initiated after the publication of a discussion paper the future of microinsurance in south africa in april 2008 available on.
Id like to receive the forbes daily dozen newsletter to get the top 12. There is growing evidence of the impact of microinsurance. Ghana association of saving and loans companies ghasalc the credit life policy is an innovative product designed by star microinsurance to provide cover for both the savings and loans companies and their clients. Some of the loyaltybased products2 are in the process of being transitioned to paid products3. Microinsurance network, this research is core to our mission to promote the development. Microinsurance is acknowledged as one of the mechanisms through which to reduce the vulnerability of the lowincome segment because planning and.
Microinsurance centre is a consulting firm dedicated to generating access to valuable microinsurance products to 3 billion lowincome people across the globe. In ghana, minsurance plays an important role in the microinsurance. May 02, 20 ghana mobile firms offer free insurance to keep customers hanging on in africa, microinsurance offers poor people a financial cushion in case of catastrophe while winning loyalty to mobile operators. Characteristics of philhealths igroup program box 7. Led by the ilos microinsurance innovation facility and the microinsurance centre, this study identified over fourteen million lowincome people in africa who were covered by microinsurance at the end of 2008. The new microfinance business models are more and more. New microinsurance institutions are emerging, while microfinance.
Firstly, what constitutes insurance and secondly, what is micro in microinsurance. Distribution examples in ghana and peru microinsurance in international markets 2. Sms credit, pooja kumar at eko, mike mccaffrey at undps pacific financial inclusion programme, nina schuler at leapfrog labs and to the teams at mtn ghana, tigo honduras, globe gcash, smart philippines and telenor pakistan. The microinsurance policy paper maps out the national insurance commissions nic future path in the regulation and supervision of microinsurance in ghana. Ghana mobile firms offer free insurance to keep customers hanging on in africa, microinsurance offers poor people a financial cushion in case of catastrophe while winning loyalty to. The microinsurance concept breaks down insurance in its traditional form into something much smallerinsuring small items such as a oneday trip or a onetime event or even health insurance. Microinsurance is the answer to the insurance industry. Leona abban is the country manager for microensure ghana.
It takes into account the submissions received, as well as. In ghana microinsurance has seen rapid growth over the past few years as more and. The program has resulted in over a million microinsurance clients, 80% of them using insurance for the first time. Microinsurance services ltd formerly microensure malawi ltd is an insurance intermediary and consulting company whose exclusive focus is to address the mass markets insurance needs to mitigate risk. This paper examines the link between microinsurance services and households asset accumulation in ghana. Microinsurance providers expressed a need for increased understanding and expertise in pricing their products. For the milife product offered in ghana, the mno mtn uses its mobile money agents for sales and enrolment. In addition, microinsurance can bridge the gap that exists between financial products for the traditionally employed and for those in the low income and informal economies, which are usually underserved by those providing mainstream financial services. This definition is exactly the same as one might use for regular insurance except for the clearly prescribed target market.
Acknowledgements the research team and authors1 of this study would like to express their sincere gratitude to all those. Government efforts to strengthen the financial sector and new leadership at the national insurance commission, the industry regulator, contributed to rising optimism in late 2017. Micro insurance agency business profile on ghanayello. There is enormous scope for increasing the practice of mfibased microinsurance, not just in terms of overall volume of business, but also in the variety of risks covered. Microinsurance innovation facility, mathilda strom at bima, doubell chamberlain at cenfri, nathan wyeth at frontline.
The ghanaian insurance industry has experienced a decade of rapid growth, and the proliferation of private companies and brokers. Yet less than 3 percent of people in the worlds 100 poorest countries have any type of insurance to protect them from financial upheaval. This is a strong indication that microinsurance is a good option for managing consumption smoothing among lowincome households. Other country experiences using cbhi schemes as a foundation for uhc box 6. Treating customers right and fairly is the aim of most companies, yet, when it comes to insurance many companies fail. It moves beyond the original microfinance handbooks focus on retail microfinance to deal with the imperative of understanding and strengthening the wider financial ecosystem, which is essential to making financial markets genuinely work. It spells out the strategic approach chosen, and the principles and key elements underlying this process. Since its launch in 2008, the ilos microinsurance innovation facility has. Workers in the developing world are more likely to experience hardships, making it nearly impossible to rise out of poverty.
Project muse microinsurance and consumption smoothing among. A microinsurance plan provides protection to individuals who have little savings and is. Social affairs assessing the success of microinsurance. Microinsurance assessment and landscape study in nigeria. The new microfinance handbook reflects this challenge. Benefits provided on a sum assured basis benefits should be paid according to.
Microinsurance note 4 product developmentmaking microinsurance products successful a critical prerequisite to the success of any new product is following a systematic new product development process. The microinsurance sector is a fastgrowing industry with a potentially untapped market of over 2 billion people worldwide. Noquibblz is our approach to claims settlement that gives you the confidence and trust allowing us to manage your clients claim settlement to. The determinants of microinsurance demand by martin eling. Our scan documented an increase in the number of new products going to market every year with the exception of 2009, which was at the height of the global financial crisis, from two in 2006 to 20 in 2012.
As a financial services product, microinsurance is characterized by low premium and low caps or low coverage limits and is intended to protect lowincome people against risks associated with microloans, agricultural output, and health. Microinsurance is growing and expanding throughout africa. One key constraint to the growth of microinsurance is the dearth of available information for mfis to draw upon. The demand for microinsurance in rural ghana microinsurance centre. You may not have heard of microinsurance before, but it is likely you have heard of things such as payasyougoinsurance metromile is a popular example. In july 2008, star microinsurance services ltd was incorporated as an independent agency to collaborate with star assurance company ltd and starlife assurance company ltd both the fourth largest general and life insurance companies respectively in ghana. Mfis are a significant channel reaching nearly a quarter of people, followed by other financial institutions, agentsbrokers, and finally member organizations. May 24, 2016 undeniably, it means if procedures and administration works perfectly, microinsurance can progressively grow to give momentum to the whole insurance sector in ghana since over 80% of the country workforce is low income individuals of which almost all are uninsured. With low margins, insurers need to find lowcost channels that can reach clients in large numbers. She worked in various departments finance, underwriting and business development and moved to microensure after 4 years.
Microinsurance product development for microfinance providers. General guide for microinsurance in the philippines. The demand for microinsurance in rural ghana microinsurance. The purpose of this paper is to identify the factors which influence the demand for micro. Using finscope data from the nationwide household surveys conducted by finmark trust, we created a household asset index using the multiple correspondence analysis approach. Microensure kenya employs the services of mpesa, a mobile money digital wallet that was developed in kenya, and frontlinesms. Ghana mobile firms offer free insurance to keep customers. Undeniably, it means if procedures and administration works perfectly, microinsurance can progressively grow to give momentum to the whole insurance sector in ghana since over 80% of the country workforce is low income individuals of which almost all are uninsured.
Microinsurance is an important mechanism for managing uncertainties and vulnerabilities of lowincome segments of the population. Microinsurance is a good instrument for improving the welfare of households and thus this research recommends its integration into the poverty reduction strategy of ghana and a greater insurance inclusion for the lower end of the market. The demand for micro insurance in ghana emerald insight. Microinsurance distribution channels executive summary distribution is a particularly important question for those looking to deliver insurance to lowincome people. It specializes in product design, product operation and claims administration in addressing the needs of the mass market. The primary objective of the technical guide is to provide the reader with greater understanding of the pricing process and tools used to improve pricing. Mobile insurance models could be either strategic mobile network operator mno offers insurance under. Credit, a free, open source software program that specializes in mobile financial services, to make microinsurance accessible and affordable to the. These are signs that the nigerian microinsurance sector is awakening and considering lowincome insurance distribution. This allows insurers to reduce expenses and fraud, as well as instills trust in customers. Insurance products that offer coverage to lowincome households. The purpose of this product is to help reduce some of the risk associated with credit delivery. Assessment of microinsurance as emerging microfinance service.
In ghana, microinsurance industry development is being spearheaded by the national insurance commission nic to expand the insurance market and facilitate improved access to and the usage of insurance services by msmes and lowincome households. Microsave india focus note 88 challenges of microinsurance in india premasis mukherjee. Microinsurance is designed to service lowincome people and businesses that are not typically served by typical social or commercial insurance entities. Pdf uptake of micro life insurance in rural ghana researchgate.
The definition of microinsurance can be split into its two aspects. In ghana, minsurance plays an important role in the microinsurance sector. She is credited with setting up ghana s first locally owned microinsurance company and developing a set of products initially deployed into newly created markets for microinsurance products in 2008. A product offered in ghana and tanzania provides free microinsurance to mobile subscribers on an opt in basis, extending life insurance in proportion to airtime purchased. Yet, billions of lowincome persons remain excluded from quality insurance services. Microinsurance is an outgrowth of the microfinancing projects developed by bangladeshi nobel prizewinning banker and economist muhammad yunus, which helped millions of lowincome individuals in asia and africa to set up businesses and buy houses. Afua boahemaa owusu is the executive director of star microinsurance ghana. Micro insurance agency accra, ghana contact phone, address. The landscape of microinsurance in ghana 2015 findev gateway.
The regulator and the government are aiming to increase insurance penetration to 10%. Brief of mobile microinsurance trends in products, providers, and business models the number of mmi deployments is growing fast. The demand for micro insurance in ghana researchgate. Microinsurance innovation facility, mathilda strom at bima, doubell. There are examples of very large companies that offer microinsurance products, including multinationals like allianz, aig and zurich. Unsgsa the key to successful microinsurance for the poor. The facility enables the insurance industry, governments, and their partners to realise the potential of insurance for social and economic development. Focus on selected countries 2 a special thank you goes to all the insurers and aggregators who dedicated their time and efforts to provide the data essential to this. Promoting microinsurance in ghana p romoting microinsurance in ghana microinsurance as a means of insurance sector development in ghana microinsurance has seen rapid growth over the past few years as more and more insurance providers have expanded their services to the lowincome market. In africa, microinsurance has been available in various forms for a number of years.
Landscape of microinsurance in ghana 2015 01 1 counted based on primary cover of the policies section 0. The microinsurance product development process is continuous and designed to ensure that appropriate products get delivered to the market in. The channels also need to be capable of selling to those with no experience of. Although uganda was one of the first countries in which a formal microinsurance product was sold in 1997, microinsurance has not developed to the extent that it has in other countries within the region. Mobile insurance minsurance is an innovative line of insurance products, whereby the mobile networks are used to deliver one or multiple components of insurance for the mass market. With a bachelors degree in biological science from the university of cape coast, leona began her career at prime insurance company limited. Catalogues or lists of new publications are available free of charge from the above address. Facts on microinsurance the ilos impact insurance facility. Nov 26, 2008 i agree to receive occasional updates and announcements about forbes products and services. Microinsurance is a mechanism to protect low income people against risk, such as accident, illness, and natural disasters, in exchange for insurance premium payments tailored to their needs, income and level of risk. Microinsurance product features and standards microinsurance refers to insurance products that are accessed to andor used by lowincome households. Increasing efficiency across the microinsurance value chain by leveraging mobile phone infrastructure insurers have made processes more efficient across the insurance value chain. Microinsurance about microfinance about microfinance.
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