Insuring the Poor: Trends and Prospects

Insuring the Poor

Risk mitigation is a priority for the poor as, more than any other group, they are vulnerable and lack resources to make them resilient in the face of disaster. Their coping mechanisms tends to be to sell assets or cut consumption, and, at worst, borrow from loan sharks, due to a lack of formal risk mitigation tools. Traditional insurance products and modes of payment (a single lump sum) often exclude the poor. Microinsurance products have been designed to fill this gap. In fact, close to 80% of those who use microinsurance products have never previously had insurance.

Though there is a long way to go before these new products cover a significant number of the poor, (less than 1% of the population is covered) there has been progress. This issue looks at trends and prospects of microinsurance in the region. Article 1 surveys overall trends in microinsurance; article 2 explores the growing use of mobile platforms for microinsurance distribution, and article 3 profiles MicroEnsure, a leader in developing the microinsurance industry in the region.

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