Now reading: Microinsurance policy – the evidence so far

Microinsurance policy – the evidence so far

Microinsurance policy – the evidence so far

7 December, 2011    

Cenfri made a presentation on microinsurance policy imperatives at the Financial Stability Institute’s meeting on microinsurance in Basel (6-8 July 2010). The meeting was hosted in collaboration with the Access to Insurance Initiative (click here to read more) and attended by an audience of supervisors from 21 developing countries. The focus was on discussing the latest developments in microinsurance and particularly the implications for policy and regulation.

Some of the issues raised in this presentation include:
  • Microinsurance offers small margins and is sensitive to any regulatory cost. This is particularly the case where regulatory costs undermine the need to achieve scale.
  • Combination products should be carefully considered as they may offer efficiencies but also complicate the product.
  • Ultimately regulation should seek to ensure that clients get value out of the product.
  • Distribution is a critical component of making microinsurance work. Regulators should seek to facilitate active sales through new and alternative distribution channels. Consumer protection and market conduct regulation should be carefully applied to ensure value to the client without undermining the delivery of the insurance product.
  • Health insurance presents particular challenges as jurisdiction and regulation on this is not always clear. This is a complex market that supervisors should take care to understand.
  • Regulation should be based on a clear understanding of the market. The diagnostic tools developed by the Access to Insurance Initiative could help regulators in this regard.
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