Page 33 - The Insurance Times October 2024

Building Sustainable

Microinsurance Models:

Lessons from Asia,

Africa, and Latin

America

Microinsurance plays a crucial role in providing financial security to low-income populations that
are often excluded from traditional insurance markets. These underserved communities are highly
vulnerable to risks such as health emergencies, natural disasters, and loss of income.

M icroinsurance plays a crucial role in providing 1. India: Agricultural Microinsurance

financial security to low-income populations
India is one of the leading countries in terms of microinsurance
that are often excluded from traditional in-
coverage, largely due to its extensive agricultural sector. The
surance markets. These underserved commu-
nities are highly vulnerable to risks such as health emergen- Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in 2016,
is one of the largest crop insurance schemes in the world. It
cies, natural disasters, and loss of income. In recent years, provides subsidized premiums to smallholder farmers, cover-
microinsurance models across Asia, Africa, and Latin ing risks related to droughts, floods, and other natural disas-
America have been developed to address these challenges, ters. The program is largely government-funded, with private
with each region offering unique insights into what makes insurers administering the policies.
an inclusive insurance model both sustainable and scalable.
Successes: PMFBY has successfully insured millions of small-
This blog provides a comparative analysis of the successes holder farmers, offering financial protection against climate
and challenges of microinsurance models in these regions, risks. By leveraging technology such as satellite data for moni-
and explores the key factors that contribute to their toring weather patterns, the scheme has been able to speed
sustainability. up payouts and improve the efficiency of claim settlements.

Microinsurance in Asia: Innovation and Challenges: Despite its scale, PMFBY has faced challenges
Scale related to the timeliness of claim payouts, as well as low
awareness and understanding of insurance products among
Asia, home to more than 60% of the global population, has
farmers. In some regions, farmers have struggled with com-
seen significant innovation in microinsurance models, par-
plicated enrollment processes and delayed compensation,
ticularly in the areas of agriculture and health. Governments
and insurers in countries such as India, the Philippines, and leading to skepticism about the program.
Bangladesh have been working to expand coverage to 2. The Philippines: Typhoon and Disaster Insur-
underserved populations through government-backed
schemes, mobile insurance platforms, and public-private ance
partnerships. The Philippines, a country prone to typhoons and earth-

30 October 2024 The Insurance Times