350 experts from 55 countries participated in the event
High level plenaries discussed climate risk insurance, the microinsurance market in Africa and distribution among other key topics
20 interactive sessions complemented the conference
3 - 5 November 2015, Casablanca, Morocco

11th International Microinsurance Conference

Impressive growth in an innovative market

Microinsurance in Africa reaches more than 60 million people. According to the “Landscape of Microinsurance in Africa 2015” study, the market grew by 30% between 2011 and 2014.

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The 11th International Microinsurance Conference took place for the first time in the MENA region and brought together some 350 participants from 55 countries to discuss how to make microinsurance more successful and sustainable. The preliminary results of the “Landscape of Microinsurance in Africa 2015” study1, presented at the conference by Munich Re Foundation and the Microinsurance Network, revealed that coverage in the region has grown from 44.4 m to 61.9 m between 2011 and 2014. More important: the premium now totals US$ 650m, making it a real business case. Taking only those institutions that reported in both periods into account, this represents a comparable growth of 30% over the three-year time period.
 
While life insurance still dominates the market, the region has evolved in terms of product development, variety and complexity: health in particular, but also property and agriculture covers, experienced a proportionately much higher growth than life. However, agriculture and property are developing from very low levels and are still far from serving a substantial number of clients. The “explosion” in health covers – as Michael McCord, Chairman of the Microinsurance Network, calls it – is primarily due to a handful of programmes offering “hospital cash or hospitalisation covers via mobile network operators (MNOs),” as he explained. Some of these products are reaching more than half a million clients. Product-wise, more than one-third of the products launched since 2011 included health coverage, while another 20% contained some form of property protection.

South Africa leads the market – but other countries are rapidly catching up  

Several countries experienced significant microinsurance development, among them Ghana, Morocco and Zambia. MNOs again played a major role in this respect. For example, the growth in Zambia is mainly due to the success of one MNO funeral product. More than half of all clients reached in Ghana are also MNO contacts. Namibia, Tanzania, and Zimbabwe, however, experienced declines in outreach. These three country cases showcase the power of intermediaries. The decrease in coverage or the discontinuation of products were all due to changes in the distribution arrangement. 
Today, there is an estimated number of slightly more than half a million people covered by microinsurance in Morocco. “To support the development of this activity, the legislator has introduced a number of amendments whose purpose is to facilitate and encourage access to microinsurance,” said Mr. Elalamy, representing Moroccan insurance supervision in his speech on behalf of the Minister of Finance of Morocco. This allowed microfinance organisations to offer their members microinsurance covering a broader range of risks. Moreover, to reduce insurance costs, these products have been exempted from certain regulatory requirements imposed on conventional products. In addition to this, it is now permitted to sell insurance through MNOs, thus opening an important new distribution channel for the Moroccan microinsurance market.
The availability of technology has improved substantially and acts as a game changer in the industry by boosting growth, especially of products distributed through MNOs. Some observations, however, pointed out that in the case of satellite technology, for instance, more data is available than is actually used. 
In the light of the G7 decisions to increase the number of people (micro)insured against climate risks, or more precisely weather disasters, many of the discussions revolved around the role of governments. The participants advocated stronger involvement of the public sector, particularly in the field of agricultural and health schemes. The industry furthermore needs stronger representation in PPPs to combine efforts and improve understanding of how and where the technology is being adequately applied.

Growth and sustainability – the need for integrated market development

Growth and sustainability – the need for integrated market developmentTo encourage the industry to be more active in the market, the participants called for the entry barriers to be kept low. Insurers suggested that an “ex-post supervision” judging performance according to outcomes would it make easer to invest in product development. In such an approach, the supervisors would focus on key performance indicators and, for example, set off an alarm when claims ratios are too low. In the case of a client getting no value from a product, this could be related to a lack of understanding of how the product works.
Education, not only on the side of the provider but also on the side of the consumer, therefore remains a key topic. This must be integrated into market development. It is difficult to develop knowledge and awareness of products if they are not available. The industry called for more detailed market research to improve understanding of demand. “But we also need to manage expectations and be realistic when it comes to time lines,” said Dirk Reinhard, Chairman of the Conference Steering Committee and Vice Chairman of Munich Re Foundation. Despite all the new technology and the G7 targets for improved access to insurance against weather risks, time is needed to reach a substantial numbers of clients. This is not likely to happen within just a few years. With the 12th International Microinsurance Conference planned to take place in Sri Lanka from 15 to 17 November 2016, Munich Re Foundation will continue its efforts to support the development of financial risk management to provide value for the poor.

About the 11th International Microinsurance Conference

The conference was hosted by Munich Re Foundation, the Microinsurance Network, the Centre Mohammed VI de Soutien à la Microfinance Solidaire and FMSAR with the support of CIMA, the CEAR, ILO's Impact Insurance Facility, Making Finance Work for Africa and Milliman.

1) This preliminary briefing note summarises some of the key insights and trends from the 2015 "Landscape of Microinsurance in Africa" study.