Meaningful micro-insurance: now a reality in developing markets

20 January 2010 Hollard

A global partnership between MicroEnsure and Hollard Insurance will soon give citizens of developing countries access to an innovative range of affordable insurance solutions.

The partnership will offer a range of products previously unavailable to low income earners by combining Hollard’s underwriting capacity, reinsurance and underwriting skills with MicroEnsure’s product knowledge, on-the-ground distribution network and ability to reach the poor. As such, it looks set to revolutionise the micro-insurance industry – making a positive difference in the lives of those who need it most.

“In many developing countries less than 10% of the population has access to insurance,” explains Stef Theofanidis, managing director: Hollard Insurance Partners. “Those who are able to afford it can usually only choose from a very limited offering and/or products that have remained unchanged for years. This lack of development has resulted in the sector remaining critically vulnerable to everything from adverse weather conditions to outbreaks of disease. As such, the value and impact of affordable, accessible micro-insurance products in this market cannot be underestimated.”

The venture will see Hollard’s balance sheet being used to underwrite a range of health, life and weather index risks initially across Africa and Asia. “In this way it will enable products like health and weather insurance to be offered in areas where a lack of underwriting capacity was previously a major constraint on market development,” says Theofanidis. The company will not only assist MicroEnsure in developing countries where Hollard is present, but will also provide access to reinsurance expertise and facilities in other jurisdictions.

According to Richard Leftley, president and CEO: MicroEnsure, the partnership represents the crossing of a key hurdle for the micro-insurance industry, “Until now, a lack of willing underwriting capacity prevented service providers from taking on health and weather risks in Africa and Asia. This challenge is however no longer a barrier to providing the poor with high impact products and world-class levels of service.”

While both Hollard and MicroEnsure describe the venture as “an exciting opportunity”, it would seem to be an even more “exciting opportunity” for low income earners and vulnerable communities across the globe. “By combining our services in this way, we are confident that this partnership will act as an economic catalyst in emerging countries: mitigating risk; enabling development and providing meaningful micro-insurance to those who need it most,” concludes Leftley.

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