Microinsurance Network Annual Report 2019
Microinsurance Network Annual Report 20198 July, 2020 •
International concern about the impacts of climate change and natural disasters has brought the insurance community together to build resilience and manage risk more effectively.
At a time when insurers should be leveraging their risk management skills and not merely selling risk transfer policies, some companies want to reduce their exposure to climate and NatCat risks, potentially shifting the burden to governments and taxpayers. Such thinking not only undermines development objectives, but makes little business sense in the transition to a
The COVID-19 pandemic has dramatically added to the risks confronting the poor and vulnerable in countries where health and social care is already stretched, and future welfare provision is far from certain. With climate and health disasters fast becoming the new normal, insurers have a unique opportunity to go beyond ‘business as usual’ and help governments, businesses and households manage the risks they face. The industry’s actions now will determine its relevance after the crisis.
Against this increasingly uncertain background, protecting low-income households and small businesses is even more important than before. Scaling up inclusive insurance is more urgent now than ever. It is encouraging to see signs of increasing interest in using microinsurance to transfer risk, sometimes complemented by macrolevel sovereign risk management and
aggregated meso-level solutions.
InsurTech has the potential to help achieve the scale needed, but the lack of digitalisation in some markets is frustrating. Progress on digital payments remains slow. Regulators need to be more open to innovative solutions for serving low-income consumers. We need to rethink the way we regulate technology and innovation if insurance is to grow and significantly reduce the impact of risk in low-income markets.
The MiN is ambitious but realistic about the role of insurance as a development tool. Inclusive insurance is essential for
sustainable development; it may not be the only solution to all development challenges, but we believe it can and should play a much greater role. By bringing the insurance ecosystem together we can achieve outcomes which would not otherwise be possible. Public-private microinsurance partnerships across emerging Asia, Latin America, the Caribbean and Africa are already reducing exposure to risks to health, life, property, businesses and farms caused by increasingly extreme and erratic weather.
In collaboration with our members and strategic partners, the MiN continues to create an enabling environment which
drives the development of effective, inclusive insurance markets that work for the poor and build resilience for
low-income households and businesses around the world.