The 6th International Microinsurance Conference was hosted by the Munich Re Foundation and the Microinsurance Network and supported by GTZ/BMZ, the Department of Finance of the Philippines, and Georgia State University’s Center for the Economic Analysis of Risk. For three days, over 80 speakers and facilitators discussed innovative and sustainable microinsurance programmes illustrated by the latest case studies and research outcomes. No less than 15 countries were also represented through the regulatory bodies of the insurance industry. This clearly signals the increasing commitment of insurance commissioners as well as a success for the initiative to develop guidelines for microinsurance regulation facilitated by the International Association of Insurance Supervisors (IAIS) and the Access to Insurance Initiative (a2ii).
At the conference opening, Cesar V. Purisima, Secretary of Finance of the Philippines, called for inclusive growth of the economy, in which “the microfinance and microinsurance initiative has a big role to play in reaching out to the poorest of the poor”. He also reminded the audience that this can only be achieved with “the right regulatory environment, the right support mechanisms and education”.
The microinsurance market in the Philippines is unique. It has a huge diversity of stakeholders, models and products, operating together in order to reach scale and sustainability. With approximately 2.9 million microinsurance clients so far, this effort is also required to reach the 35 million potential client base (including families and households).The government of the Philippines is truly committed to providing the best possible support and was therefore commended throughout the conference. The Philippines act as a role model for other countries in the world.
To reach scale and sustainability, though, more innovative products and creative low-cost distribution channels need to be developed. Experts estimate that 140 million people, mostly in Africa and Asia, are now covered by affordable insurance premiums. Studies show that the potential market is up to three billion, but more than half of all microinsurance products are focused on life and health while less than 10% cover farms.
The question, whether microinsurance can really make a difference serving the poor in the event of typhoons, earthquakes, droughts, floods, and other natural disasters is a difficult one to answer as most programmes are still in the pilot phase. However, first covers exist for property and loans impacted during weather events or earthquakes. In the Philippines, cyclone effects can more or less be microinsured. A recent study on weather index insurance concluded that “governments and donors will need to intervene more actively by playing important enabling and facilitating roles and supporting the development of the sector”. It is important to “create a proposition of real value to the insured, and offer insurance as part of a wider package of services”.
The 6th International Microinsurance Conference was not only about success stories, but also introduced critical thinking and discussions, well balanced by a mix of practitioners, academics, and industry leaders. The many, mostly interactive sessions integrated the participants’ experiences and background knowledge to enhance the learning shared by the speakers.
The scientific track, first introduced in 2009, focused on the economic analysis of microinsurance markets and aimed to build a bridge between academic research needs and those of the microinsurance industry. Common perceptions of consumer behaviour were challenged. The research presented during the academic session can contribute substantially to a better understanding of what drives customer behaviour and how we can tap into this.
“Challenges still lie ahead, like making microinsurance climate change-proof. But creative solutions are constantly emerging, and we are already looking forward to the next conference that will take place in Brazil”, said Dirk Reinhard, Chairman of the Conference Steering committee and Vice Chairman of the Munich Re Foundation during the closing of the conference.
Conference details and results will be published by the Munich Re Foundation in a special conference report. The International Microinsurance Conference 2011 will take place in Rio de Janeiro in November and will be supported by CNSeg, formerly Fenaseg, the Brazilian insurance association.