WWW.BOOK.DISLIB.INFO
FREE ELECTRONIC LIBRARY - Books, dissertations, abstract
 
<< HOME
CONTACTS



Pages:     | 1 |   ...   | 101 | 102 || 104 | 105 |   ...   | 108 |

«Protecting the poor A microinsurance compendium Edited by Craig Churchill Protecting the poor A microinsurance compendium Protecting the poor A ...»

-- [ Page 103 ] --

The future success of microinsurance depends on achieving prudent, profitable and continuous growth and development. What will be the development lifecycle for microinsurance? How long will it be? Some say that microinsurance is still at the conceptual stage and a good case can be made for this perspective. However, for the men and women out in the field today, whose efforts have been the raw material for this book, microinsurance is quite re al, even if it is still early days. Their hopes for the short-to-mediumterm future are the focus of this chapter.

–  –  –

The goal of microinsurance is to make appropriate, affordable risk-management products available to the poor, to help support their economic development and to enable them to achieve financial freedom for themselves and future generations. Microinsurance complements and enhances the effectiveness of informal coping mechanisms, and supplements statutory social protection schemes where they are available.

Chapter 1.1 summarizes the many challenges that inhibit the development and expansion of microinsurance; the subsequent pages are filled with numerous examples of how schemes are overcoming them.

However, a number of further obstacles must be faced if insurance markets are to become significantly more inclusive. To massively increase the outreach of insurance services to low-income households, and to deepen penetration to reach those who are even more vulnerable, it is necessary to tackle these challenges (highlighted in Table 52). This chapter summarizes some of the solutions that need to be considered to expand the availability and enhance the quality of microinsurance.

Continuing challenges that limit the expansion of microinsurance Table 52

–  –  –

1 Microinsurance customers of the future Microcredit has had an important impact on the ability of poor people to rise above the poverty line. Although the development of microinsurance is more recent, preliminary and anecdotal evidence suggests that it can be an important factor in enabling people to remain above the poverty line. By providing protection against certain perils, microinsurance serves as a natural complement to other financial and social services for the poor. For it to fulfil its potential, it is necessary to develop an insurance culture among the lowincome market, as well as to introduce products that meet their primary needs, particularly for those who are most vulnerable.

1.1 Education and culture Yet the demand for microinsurance requires some coaxing. The case studies noted that greater efforts need to be invested in market education so that potential policyholders understand and appreciate the value of insurance. In fact, successful insurers in developed markets continue to provide their clients and the general population with education on certain topics, leading to improved underwriting experience and customer loyalty. There is certainly a need to develop better pedagogical tools to convey the usefulness of insurance to an illiterate or uneducated market. To make a significant impact, however, client education is insufficient. Rather, stakeholders in the development of microinsurance – including providers, policymakers and donors – need to cultivate an insurance culture among the poor.

An insurance culture is a prerequisite for the success of microinsurance.

In many developed countries, it took generations before people commonly turned to insurance to address their risk-management needs. Microinsurance providers will help build the culture of insurance when they serve their

clients’ needs in a fair and equitable way. The product is the starting-point:

clients need to know that they have cover and they need to witness the regular provision of benefits.

Paying a claim – delivering on a promise – is arguably the single most important opportunity to reinforce the value of insurance, and therefore claims need to be handled efficiently and appropriately. Too often, benefits are not delivered as promised and this leads to an anti-insurance culture.

Many microinsurance programmes operate in these anti-insurance cultures and struggle to counter the prevailing sentiments.

The evolution of attitudes to insurance will be affected by the ability of providers to continuously improve processes, services, benefits and costs for clients. Governments and civil society can contribute to the development of

586 Conclusions

such a culture through educational programmes. This culture is reinforced when associations and employers begin offering insurance as membership or employment benefits. In developed countries, the growth of an insurance culture has been further supported by the prevalence of obligatory, government-mandated cover such as third-party liability cover for vehicles. Many people’s experiences with these products have helped them to understand insurance, and in some cases encouraged them to seek out voluntary products as well.

For low-income persons in developing countries, the relevant parallel experience could come from credit life insurance provided through microfinance institutions. If MFIs can ensure that their clients have a positive experience, the poor may be more interested and willing to voluntarily purchase other insurance products. Consequently, there should be significant cause for concern when credit life is not taken seriously by MFIs (or their risk carriers) and when efforts are not made to ensure the poor have a positive experience with insurance. Every late payment or summarily rejected claim and every instance of opaque pricing or misinformation about the scope of cover, will add to the time it takes to foster an insurance culture.





To maintain a culture of insurance, providers should strive to serve customers throughout their lives rather than getting them on board and then neglecting their changing needs and circumstances. Lack of attention from the provider is a key cause of high lapse rates and gaps in coverage associated with many microinsurers. Efforts to minimize lapses and non-renewals should include using appropriate premium payment and financing mechanisms, as well as market education and marketing approaches that avoid misdirected and self-serving sales incentives. When microinsurance markets reach a stage where people really understand and appreciate what they are buying, lapses and non-renewals will become less frequent.

1.2 Product evolution Insurance for the poor needs to develop as the demand for those services evolves. Health cover is the next priority, especially in countries where the governments cannot adequately address the healthcare needs of their citizens.

Soon, there may be growing demand for long-term, retirement insurance or old-age pensions, as well as for disaster, housing, and in some areas, livestock and agricultural insurance. These are risks that cannot be managed by savings and credit alone. If microinsurance providers cannot keep up with these demands, they may stifle the development of an insurance culture as lowincome persons lose confidence in risk-pooling mechanisms.

The future of microinsurance 587 Insurance products sold through organizations that potential policyholders trust could also help develop positive attitudes. An insurance culture will emerge only when it is supported through word-of-mouth communication that promotes and spreads awareness of insurance. The combination of a trusted intermediary and word-of-mouth communication may be why many credit unions have been effective in generating an insurance culture among their members.

Microinsurance products that respond appropriately to potential policyholder needs and demands will help to generate an insurance culture. The key strategy to achieve this goal is to involve policyholders (or prospective clients) in the process of making hard choices between benefits and price.

Tools that enable clients to see the trade-offs and voice their preferences will go a long way towards appropriate product design.

A long-term, multi-generational outcome is an enticing reason for insurers to enter this market, even though it is incompatible with the short-term perspective of most companies. In developing countries, millions of today’s poor households will be tomorrow’s middle class. Historically, the measure of success most revered among large multi-line insurance companies is the ability to build lifetime relationships with their clients, even multi-generational ones, providing products and services to cover changing needs throughout the policyholder’s life. This is common knowledge to insurance sales agents who rely on referrals for their business and is evident in the multi-line companies that monitor the number of products per customer or household.

The overriding objective of microinsurance is to enable low-income people to protect wealth and achieve some level of economic security. Helping customers to achieve these goals also creates an ideal market for patient insurers; the long-term market potential is huge. Furthermore, brand loyalty is high in this market segment, which makes this argument that much more compelling.

In the long term, microinsurance policyholders will become more knowledgeable about insurance. They will recognize the potential for insurance to address some of their risk-management needs, and they will seek out such cover. They will understand the different risks and capabilities of insurance providers and will be able to make appropriate choices and decisions. Lowincome consumers will push the insurance providers to offer the products they want. Microinsurers today have an obligation to help their clients become more knowledgeable, while preparing themselves to serve a more sophisticated market.

The more the target market understands insurance, the more aware they will be of the limitations of market-based solutions. This recognition will

588 Conclusions

also help empower low-income communities to demand publicly-provided social protection services – after all, social security is a human right. Plus, there will always be a market segment that contributory insurance schemes cannot reach – the chronic or hard-core poor – which must be covered by government programmes. The ongoing challenge in the development of microinsurance is to determine where that frontier lies. How far can the envelope be pushed? What segments of the market could ultimately be reached through continued improvement in delivery mechanisms and efficiency? Similarly, how can microinsurance distribution mechanisms enhance access to government-provided social protection schemes?

2 Microinsurance providers of the future The second set of challenges that need to be addressed involves the providers themselves. These issues fall into three categories: 1) building the capacity of management and staff, 2) enhancing efficiency, including the use of technology and 3) finding a business model that works for all stakeholders and balances short-term viability with long-term growth.

2.1 Building capacity Since microinsurance is a relatively new endeavour, it is not surprising that there is a need to build up the capacity of providers. While the case studies indicate that some effort should be channelled to improve existing providers, to fill the enormous access chasm, investments also need to be made in new delivery channels and perhaps in creating new insurers.

The capacity challenges exist on two levels: field staff and management. In general, the field staff associated with the distribution channel – the agents selling and servicing the policies, or the managers of mutual schemes – require additional expertise in sales skills, insurance basics, adult education techniques and customer service. Just as important as the skills, however, is creating a work environment that allows schemes to retain qualified personnel. Currently, many microinsurers and their distribution channels experience high turnover of frontline personnel. Consequently, there is a great need to consider the compensation, incentives and career development of those who have the expertise of selling and servicing insurance for the poor.



Pages:     | 1 |   ...   | 101 | 102 || 104 | 105 |   ...   | 108 |


Similar works:

«Enterotypes are Shared by Chimpanzees and Humans Andrew H. Moeller1, Patrick H. Degnan1, Anne E. Pusey2, Michael L. Wilson3, Beatrice H. Hahn4, and Howard Ochman1* Department of Ecology & Evolutionary Biology, Yale University, New Haven, Connecticut, USA Department of Evolutionary Anthropology, Duke University, Durham, North Carolina, USA Department of Anthropology, University of Minnesota, Minneapolis, and Department of Ecology, Evolution & Behavior, University of Minnesota, St. Paul,...»

«APWU Health Plan CONVERSION PLAN Terms & Conditions Brochure American Postal Workers Union Health Plan Conversion Plan This brochure is intended to be a complete statement of benefits available to individuals covered by the APWU Health Plan Conversion Plan, hereafter referred to as the APWU Conversion Plan or the Plan. It describes the benefits, exclusions, limitations, and maximums of the APWU Conversion Plan which are effective as of January 01, 2014, and until amended. It also describes...»

«Handbook of User Involvement in Nursing and Healthcare Research: Putting Principles into Practice By Ross, Fiona Mary, Brearley, Sally, Boaz, Annette, Morrow, Elizabeth Do you need the book of Handbook of User Involvement in Nursing and Healthcare Research: Putting Principles into Practice by author Ross, Fiona Mary, Brearley, Sally, Boaz, Annette, Morrow, Elizabeth? You will be glad to know that right now Handbook of User Involvement in Nursing and Healthcare Research: Putting Principles into...»

«Fakultät für Medizin Abteilung für Nuklearmedizin Abteilung für diagnostische und interventionelle Neuroradiologie Multimodal neuroimaging on neurodegenerative disorders using the hybrid PET/MRI technique Masoud Tahmasian Vollständiger Abdruck der von der Fakultät für Medizin der Technischen Universität München zur Erlangung des akademischen Grades eines Doctor of Philosophy (Ph.D.) genehmigten Dissertation. Vorsitzender: Univ.-Prof. Dr. Arthur Konnerth Betreuer: Univ.-Prof. Dr....»

«Chapter 14 Frontal lobe epilepsy BEATE DIEHL1, SANJAY M. SISODIYA1 and MARK MANFORD2 Institute of Neurology, University College London, National Hospital for Neurology and Neurosurgery, Queen Square, London, and Epilepsy Society, Chalfont St Peter, Buckinghamshire, and 2Addenbrookes Hospital, Cambridge While frontal lobe epilepsy accounts for only 1020% of patients in surgical series, the prevalence in non-surgical cohorts is probably higher. Frontal lobe epilepsy (FLE) probably represents...»

«Aus dem Institut für Anatomie der Universität Rostock Direktor: Prof. Dr. med. A. Wree Das Konnektom der Basalganglien der Ratte Inauguraldissertation zur Erlangung des akademischen Grades Doktor der Medizin der Medizinischen Fakultät der Universität Rostock vorgelegt von Richard Kettlitz Rostock, 2013 Dekan: Prof. Dr. med. E. Reisinger urn:nbn:de:gbv:28-diss2015-0230-8 Dekan: Prof. Dr. med. E. Reisinger 1. Gutachter: Prof. Dr. O. Schmitt – Universitätsmedizin Rostock / Institut für...»

«Aus der Klinik und Poliklinik für Psychiatrie und Psychotherapie der Ludwig-Maximilians-Universität München Vorstand: Herr Prof. Dr. med. H.J. Möller Die Bedeutung von Neuregulin 1 in der Schizophrenie Dissertation zum Erwerb des Doktorgrades der Medizin an der Medizinischen Fakultät der Ludwig-Maximilians-Universität zu München vorgelegt von Hans-Peter Zipp aus Herborn Mit Genehmigung der Medizinischen Fakultät der Universität München Berichterstatter: Priv. Doz. Dr. med. D. Rujescu...»

«Division of Biostatistics & Bioinformatics Department of Public Health Sciences ————————————————– 500 University Drive Arthur S. Berg, PhD Hershey, PA 17033 mobile 717.982.7828 office 717.531.3039 berg@psu.edu Curriculum Vitæ http://cv.arthurberg.com September 22, 2015 Research Interests Biomedical clinical informatics, electronic health record research, patient-centered outcomes research, Informatics translational informatics. Bioinformatics arrays (genotype,...»

«Report No. D-2011-048 March 7, 2011 American Recovery and Reinvestment Act ProjectsFacility Energy Improvements and Wind Turbine and Photovoltaic Panels at Fort Wainwright, Alaska Additional Information and Copies To obtain additional copies of this report, visit the Web site of the Department of Defense Inspector General at http://www.dodig.mil/audit/reports or contact the Secondary Reports Distribution Unit at (703) 604-8937 (DSN 664-8937) or fax (703) 604-8932. Suggestions for Audits To...»

«Identifying and Responding to Substance Use among Adolescents and Young Adults: A Compendium of Resources for Medical Practice THE ABAM FOUNDATION NATIONAL CENTER FOR PHYSICIAN TRAINING IN ADDICTION MEDICINE Identifying and Responding to Substance Use among Adolescents and Young Adults: A Compendium of Resources for Medical Practice Prepared by: The National Center for Physician Training in Addiction Medicine Funded by: The American Board of Addiction Medicine Foundation Copyright@2015 The...»





 
<<  HOME   |    CONTACTS
2016 www.book.dislib.info - Free e-library - Books, dissertations, abstract

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.