Microinsurance provides simple policies for low-income customers with small premiums, offering alternatives like loans, savings, or asset sales. The target demographic typically earns between $1.25 and $4.00 per day, with programs needing to balance high enrollment with low costs for sustainability. The landscape for microinsurance is evolving, with a focus on financial inclusion and the necessity of maximizing scale while minimizing expenses.

1. Andrea Keenan
Senior Managing Director
Building the Insurance Market
2015 ICMIF Biennial Conference
8 October 2015
Minneapolis, Minnesota

2. Microinsurance Basics
2
• Offers simple policies to low-income customers with
small premiums and low sums assured
• Alternatives to insurance for this population:
– Family/friend loans or gifts
– Savings
– Selling assets
• Target demographic:
– Income $1.25-$4.00 / day
Traditional
Insurance
Microinsurance
Government (or other)
Assistance
GDPPerCapita

3. Targeted Groups in Micro
3
Income Quintiles
(Avg GDP per capita)
Microinsurance target range

4. Targets in India & Philippines
4
Income Quintiles
(Avg GDP per capita)

5. Today’s Landscape
5

6. Micro Programs: What works?
6
• Profitability ≈
𝒄𝒐𝒗𝒆𝒓𝒆𝒅 𝒍𝒊𝒗𝒆𝒔) 𝒙 (𝒖𝒏𝒊𝒕 𝒑𝒓𝒆𝒎𝒊𝒖𝒎
𝒄𝒍𝒂𝒊𝒎𝒔 + 𝒇𝒊𝒙𝒆𝒅 𝒄𝒐𝒔𝒕𝒔 + (𝒗𝒂𝒓𝒊𝒂𝒃𝒍𝒆 𝒅𝒊𝒔𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 & 𝒂𝒅𝒎𝒊𝒏 𝒄𝒐𝒔𝒕)
• A successful, sustainable program relies on a formula of
large scale and low cost.
Formula derived from MILK / MicroInsurance Centre
Maximize
High!
Minimize
Minimize

7. Cost Reduction Techniques
7

8. Financial Inclusion Wave
8
• Microinsurance is no longer a novel phenomenon
• Active in micro: