9th International Microinsurance Conference 2013
Number of insured low-income people in Asia and Oceania in excess of 170 million
The 9th International Microinsurance Conference, which took place in Asia for the third time, brought together some 400 participants from nearly 60 countries to discuss the challenges and opportunities in microinsurance.
Government schemes are playing a leading role
However, the landscape of risk coverage for the low income market in Asia and Oceania is dominated by government schemes, covering over 1.6 billion people. Tran Dooc, Insurance Commissioner in the Philippines, has said that “in addition to products like life or health insurance, especially disaster-related insurance needs more support. There is a great need for government intervention.” The market is not providing the requisite solutions. The Philippines received several wake-up calls even before typhoon Haiyan devastated the country.
“The extension of insurance to new markets represents a tremendous opportunity and a tremendous responsibility”, Craig Churchill, Chairman of the Microinsurance Network, stated during his opening speech. “Formal insurance does not come naturally to persons who have never had it before. Consequently, it is absolutely critical that, when getting insurance for the first time, they have a positive experience with the product and its benefits. Needing insurance is like needing a parachute. If it isn't there the first time, chances are great that you won´t be needing it again”, Churchill concluded.
Regulation is key to increasing outreach
Only two weeks before the International Microinsurance Conference, the Indonesian Financial Service Authority (OJK) launched its vision, the “grand design of microinsurance”. 250 million people live in the country and the population is still growing at a rate of 2% per year. That is the equivalent of adding the population of Singapore on an annual basis. According to the Central Bank of Indonesia, the financial inclusion index of Indonesia stood at about 20 percent in the year 2011, compared to 73 percent in Thailand, 66 percent in Malaysia, 35 percent in India and 27 percent in the Philippines. According to the Landscape Study, only one third of the population has a bank account and microinsurance penetration is below 0.6%.. One of the goals of OJK is therefore to improve the financial literacy of the broad public at large. “Financial literacy is important as it can accelerate people’s economic activities, which ultimately improves people’s welfare. Improving the level of financial literacy is paramount for further lifting Indonesia’s economic development”, Kornelius Simanjuntak, Chairman of Insurance Council of Indonesia (DAI) stated.
With the 10th International Microinsurance Conference to take place in Mexico in 2014, the Munich Re Foundation and the Microinsurance Network will further support the improvement of insurance knowledge. The event will address specific issues not only in the Latin American context but also far beyond. At this 10th anniversary of the International Microinsurance Conference we will see that microinsurance is about to grow out of its infancy.
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