Less than 5% of people insured across Asia & Oceania

Microinsurance in Asia and Oceania has continued to grow at up to 40%, but more than 95% of the population remain without cover, new research has found.

According to a new report released by the Munich Re Foundation and GIZ, Microinsurance reached 172 million lives and properties covered, representing a 40% annual growth rate between 2010 and 2012. India is leading the market at over 100 million, whilst Malaysia and Indonesia emerge as having the most vibrant microinsurance markets with a growth rate of 185% and over 100% respectively, over the same time period.

Access to effective insurance by low income people is essential to sustainable development.
Access to effective insurance by low income people is essential to sustainable development.

Despite these encouraging achievements, the microinsurance sector today covers less than 5% of the people living in Asia and Oceania. “When low-income people are unable to manage risk, they cannot break out of the cycle of poverty” said Craig Churchill, Chair of the Microinsurance Network and Head of ILO’s Microinsurance Innovation Facility. For this reason, “access to effective insurance by low income people is essential to sustainable development.”

Currently life insurance is the main risk for which people are covered (83m), followed by accident (77m), health (27m), agriculture (26m), and property (7m) insurance.

In addition, over 1.6 billion are estimated to be covered by subsidized schemes referred to as “social microinsurance” or social protection schemes. “Market-based microinsurance needs to be complemented by schemes with governmental involvement to increase outreach, especially in the fields of agriculture and health,” added comments Dirk Reinhard, Vice Chairman of the Munich Re Foundation. “It is important that approaches based on insurance principles are being developed jointly, involving the insurance industry, regulators and client representatives, as well as donors,”

Capacity development along the value chain is a key factor for the sector going forward. According to Dr. Antonis Malagardis, Programme Director of the GIZ Programme Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia (RFPI Asia) “The capacity development strategy of RFPI Asia prioritises the development of trainers and experts on inclusive insurance regulation, particularly in key areas such as agriculture, disaster risk management, SMEs and Islamic insurance.”

The 9th International Microinsurance Conference, taking place in Jakarta, Indonesia, November 12-14, will bring together around 400 experts on microinsurance. The conference, co-hosted by the Munich Re Foundation, the Microinsurance Network, Insurance Council of Indonesia (DAI) and the Indonesian Financial Services Authority (OJK) will focus on the status and trends of microinsurance in the region and globally, covering critical topics such as distribution, business models, and investments.

OJK, together with DAI, recently launched a blueprint to support marketing and implementation of micro-insurance products across Indonesia by 2016. “The conference is a great opportunity for Indonesia to develop our microinsurance sector and learn from the experiences of our peers across the globe” says Kornelius Simanjuntak, Chairman of DAI and Chairman of the General Insurance Association of Indonesia (AAUI).

“The conference is particularly timely given the joint effort of OJK and the insurance industry to develop microinsurance in Indonesia, as part of our financial inclusion programme” comments Firdaus Djaelani, CEO of Non-Bank Financial institutions (NBFI) Supervision and Member of the Board of Commissioners of OJK. “We hope many of our insurance providers will have the opportunity to attend and learn from microinsurance experts worldwide.”

About alastair walker 8694 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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