Microinsurance

Knowledge Center

   

Description of Microinsurance. Explanation.

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print
 
Microinsurance

Definition Microinsurance. Description.


Microinsurance is a type of insurance with low premium and low limit coverage targeted to low-income people.


The term Microinsurance is an extension of the concept of Microfinance into insurance services. An appropriate definition comes from C. Churchill in his 2006 book Protecting the Poor: A Microinsurance Compendium. The author defined micro-insurance as:


“a financial arrangement to protect low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved”.


This definition doesn’t mention the size of the company providing this service, it could be a Microfinance Channel or an Insurance MNC; also the channel utilized can be a traditional one, the Microfinance Channel, or any other type of community based scheme.


The term micro in Microfinance refers to the lower premium to be paid and thus the lower coverage on insured goods or events, compared to traditional insurance services. Although for a policyholder the magnitude of a risk is not micro and the perils could be seriously damaging events such as a natural disaster, death, loss of livestock animals, sickness, disability, property damages, etc…


Microinsurance has been designed to mitigate different types of risks of the Bottom of the Pyramid customers, who are not included in any social or commercial insurance scheme, to secure continuity of their businesses. Microinsurance is still an experimental phase even though some products are available in several developing countries. The future challenge for Microinsurance providers is bridging the gap between an adequate and satisfactory protection for poor households and the affordability of premiums to be paid.


Microinsurance Forum
  Cases of Microinsurance. Examples
Hi, do you know of a remarkable case or a famous example in which a microinsurance approach was used?
Please enter a reaction to share it for other people to enjoy!
Thanks for contributing...!...
     
 

Microinsurance Special Interest Group


Special Interest Group

 

Best Practices - Microinsurance Premium

Expert Tips - Microinsurance Premium

Resources - Microinsurance Premium
 

News

Microinsurance
     
 

Videos

Microinsurance
     
 

Presentations

Microinsurance
     
 

More

Microinsurance
     

Compare with: Microfinance  |  RAROC  |  Portfolio Insurance

Special Interest Group Leader

You here


 

Return to Management Hub: Ethics & Responsibility  |  Finance & Investing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Microinsurance summary and forum.

About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2016 12manage - The Executive Fast Track. V14.1 - Last updated: 4-12-2016. All names tm by their owners.