The potential of microinsurance: targeting middle income populations in emerging markets.
There is no standard, accepted definition of microinsurance; as such, this report will generalize it as insurance that is accessed by the lower economic echelons of a population. Microinsurance serves to improve coverage of basic human necessities in terms of business lines such as health, life, funeral, property and agriculture. Such micro policies transfer risk from low-income individuals--who do not have access to traditional insurance--to a group. Typical characteristics of microinsurance are:
* Low-cost transactions;
* Simple risk coverage;
* Low net-worth clients; and
* Community involvement.
The characteristics of low-cost transactions, simple risk coverage, and low net-worth clients are similar to those once found in home-service or industrial-life policies around the turn of the 20th century in the United Kingdom and United States. These policies were more prevalent after the industrial revolutions and evolved into more traditional lines that contributed to a virtuous cycle of protection, savings and increased wealth. Present-day emerging market economics that are cultivating microinsurance would like to see a similar evolution.
Analytical Contact Andrea Keenan, Oldwick +1 (908) 439-2200 Ext. 5084 Andrea.Keenan@ambest.com
Editorial Management Carol Demyanovich, Oldwick +1 (908) 439-2200 Ext. 5836 CaroI.Demyanovich@ambest.com
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|Title Annotation:||BEST'S SPECIAL REPORT: Microinsurance|
|Date:||Apr 1, 2012|
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