The Landscape of Microinsurance in Latin America and the Caribbean 2014

This year’s landscape study identified 48.6 million people in the Latin America and Caribbean region as covered by at least one microinsurance policy, versus 45.5 million people identified in the 2012 study (based on 2011 data). The study identified 6.8% more lives covered than in 2011. However, the comparable rate of growth for institutions who reported data in both studies is more modest at 2%. The “microinsurance explosion” observed for the period 2005 to 2011 (with 14% compound annual growth rates) has been replaced by a slower growth phase with continued dominance of life and accident products

What’s new?

The trend towards mass market insurance in the Latin American and Caribbean market is obscuring the differentiation between middle-income and lowincome clients, and several insurers reported shifting from microinsurance to the mass market. The total identified microinsurance written premiums in the region amount to almost USD 830 million, up from USD 747 million in 2011.
 
The rate of growth in premiums outpaced the growth in the policyholder base. The median claims ratio across products is about 25%, with credit life having the highest median claims ratios, at around 45%. 

The array of new distribution channels seen in the 2012 study appear to be more effectively leveraged by 2014, reflected by more clients per product than traditional channels like microfinance institutions (MFIs).
 
Commissions have become an issue for some insurers offering microinsurance, particularly those working with non-traditional channels. While most channels seek commissions of between 10% and 30% of premiums, close to one quarter seek more than this, up to 60%.

Key Numbers

  • Of all countries in the region, 21 had microinsurance activity in 2013
  • USD 830 million in microinsurance premiums
  • Microinsurance outrach: 7.9% of total population
  • 94 providers reported data for over 200 products
  • 48.6 million total people insured
    • 32.9 million – Life (non-credit)
    • 20.8 million – Accident
    • 19.7 million – Credit Life
    • 7.6 million – Health
    • 2.7 million – Property
    • - 2.2 million – Agriculture3