Caption: Access to effective insurance by low income people is essential to sustainable development. Approaches based on insurance principles are the best way to provide access to risk management tools providing value for billions of people and small businesses. Photo: M. Moniruzzaman .      

Over 170 million low-income people are benefitting in the region.

According to new research released by the Munich Re Foundation and GIZ, the microinsurance sector in Asia and Oceania has reached 172 million lives and properties covered, representing a 40% annual growth rate between 2010 and 2012. India is leading the market at over 100 million, whilst Malaysia and Indonesia emerge as having the most vibrant microinsurance markets with a growth rate of 185% and over 100% respectively, over the same time period.

Despite these encouraging achievements, the microinsurance sector today covers less than 5% of the people living in Asia and Oceania.1 “When low-income people are unable to manage risk, they cannot break out of the cycle of poverty” says Craig Churchill, Chair of the Microinsurance Network and Head of ILO’s Microinsurance Innovation Facility. For this reason, “access to effective insurance by low income people is essential to sustainable development.”

Currently life insurance is the main risk for which people are covered (83m), followed by accident (77m), health (27m), agriculture (26m), and property (7m) insurance.1 In addition, over 1.6 billion are estimated to be covered by subsidized schemes referred to as “social microinsurance” or social protection schemes. “Market-based microinsurance needs to be complemented by schemes with governmental involvement to increase outreach, especially in the field of agriculture and health. It is important that approaches based on insurance principles are being developed jointly, involving the insurance industry, regulators and client representatives, as well as donors,” comments Dirk Reinhard, Vice Chairman of the Munich Re Foundation. Capacity development along the value chain is a key factor for the sector going forward. According to Dr. Antonis Malagardis, Programme Director of the GIZ Programme ‘Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia’ (RFPI Asia) “The capacity development strategy of RFPI Asia prioritises the development of trainers and experts on inclusive insurance regulation, particularly in key areas such as agriculture, disaster risk management, SMEs and Islamic insurance.”

The 9th International Microinsurance Conference, taking place in JakartaIndonesiaNovember 12-14, will bring together around 400 experts on microinsurance. The conference, co-hosted by the Munich Re Foundation, theMicroinsurance NetworkInsurance Council of Indonesia (DAI) and the Indonesian Financial Services Authority (OJK) will focus on the status and trends of microinsurance in the region and globally, covering critical topics such as distribution, business models, and investments.

OJK, together with DAI, recently launched a blueprint to support marketing and implementation of micro-insurance products across Indonesia by 2016. “The conference is a great opportunity for Indonesia to develop our microinsurance sector and learn from the experiences of our peers across the globe” says Kornelius Simanjuntak, Chairman of DAI and Chairman of the General Insurance Association of Indonesia (AAUI). “The conference is particularly timely given the joint effort of OJK and the insurance industry to develop microinsurance in Indonesia, as part of our financial inclusion programme” comments Firdaus DjaelaniCEO of Non-Bank Financial institutions (NBFI) Supervision and Member of the Board of Commissioners of OJK. “We hope many of our insurance providers will have the opportunity to attend and learn from microinsurance experts worldwide.”

Reinhard Dirk – MR Foundation

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