Africa has 5% market share as world micro insurance reaches 500 million persons – ILO
The number of microinsurance schemes worldwide has increased substantially over the past five years and now reaches an estimated 500 million worldwide as Africa’s share of the market remains low, according to a new report published by the International Labour Organization April 10, 2012.
Titled “Microinsurance Compendium, Protecting the poor”, the report, which was prepared by the Microinsurance Innovation Facility of the ILO and the Munich Re Foundation, said “the number of people covered by microinsurance rose from 78 million in 2007 to 135 million in 2009, reaching nearly 500 million today.”
The growth of the microinsurance was driven by persons in Asia as the report said “two microinsurance powerhouses: China and India – are spearheading the trend, covering roughly 80% of the market. It is estimated that 60% of people around the world who are covered by microinsurance live in India.”
Africa’s share of the microinsurance world market was 5% while Latin America accounted for 15%, the reported indicated.
Explaining why Asia is ahead of the game, the report said it was due to “large and dense populations, interest from public and private insurers, proper distribution channels and active government support.”
The microinsurance aims at protecting poor people against risks – such as accidents, illnesses, death in the family, natural disasters and property losses – in exchange for insurance premium payments tailored to their preferences and capacity to pay.
Mr Craig Churchill, Team Leader of the ILO’s Microinsurance Innovation Facility in a statement said “Since 2008, we have seen numerous innovations emerging to overcome the challenges of providing viable insurance services to more low-income people.”
Churchill advised that efforts now should “focus on increasing effectiveness so that insurance products can successfully reduce their vulnerability”.
By Ekow Quandzie
Watch ILO’s Craig Churchill on the expansion of Microinsurance coverage