Page 119 - India Insurance Report 2023- BIMTECH

India Insurance Report - Series II 107

Empowering the Unprotected:

Microinsurance’s Journey Beyond

Bismarck and Beveridge

- David M. Dror 1
13 Ph.D., DBA | Retired I Scholar and Practitioner
concentrating on universal social protection

Synopsis

This chapter offers a detailed analysis of microinsurance (nowadays often called “inclusive insurance”),
an innovative hybrid model combining grassroots initiatives with top-down approaches to reach populations
not covered by government-operated social protection systems. With half of the global population,
primarily in low and middle-income countries, lacking social protection, the chapter focuses on the potential
of microinsurance to address this pressing issue. The commercial microinsurance attempts, often labeled
as “insurance for the poor,” have been largely insufficient. An alternative lies in the “Collaborative and
Contributive” (C&C) model of microinsurance, which harnesses social forces, typically more compelling
than market forces in informal settings, to stimulate demand. The chapter evaluates microinsurance’s
social and economic impacts, drawing insights from twenty-five years of progress. It underscores the need
for policymakers, international development bankers, and the reinsurance industry to recognize the
potential of the C&C model in providing comprehensive insurance to marginalized populations.

1. Introduction

This chapter tackles a significant global development issue: the systemic exclusion of half the world’s
population from vital social protection systems [1]. Such systems, encompassing crucial services like
health insurance, social security, and social assistance, remain inaccessible to a large proportion of the
global population. This widespread lack of access deprives numerous individuals of universal social
protection coverage’s social and financial benefits. It hinders economic growth and equitable income
and wealth distribution in various countries. A multitude of complex and interrelated factors drive this
troubling situation.

1 The author would like to sincerely acknowledge the invaluable review comments offered by Prof.
Martin Eling, Dr. Nihar Jangle, and Mr. John Woodall. Their constructive feedback has significantly
enhanced the quality of this work. However, any assertions or conclusions drawn in this article are the
sole responsibility of the author.