Learn Microinsurance

A Brief Introduction to Microinsurance

Generally speaking, microinsurance are insurance services adapted to the needs and realities of low-income people. Microinsurance, as discussed here, is part of the private, commercial insurance products. Good microinsurance products and services balance the need for the provider to be profitable and true value for the customer. The target market is the lower-income segment of the population and not the poorest of the poor, who should benefit from other services such as government sponsored social security programmes.

In most countries, including the Philippines, the insurance industry is divided into Life insurance and non-life (or general) insurance. For both activities, a license is required by the Philippines Insurance Commission and one company can hold only one type of license.

What sets microinsurance apart from traditional insurance products are various design elements including how it is marketed, sold and administered as well as how claims are paid. Good microinsurance products are SUAVE , which stand for:

Simple – in every way for policyholders, beneficiaries, rural banks, and insurers. For example, policies with pages of small print are useless to illiterate policyholders; and complex claims procedures only frustrate legitimate beneficiaries.

Understood – by the policyholder, which usually requires components of education such as insurance market education programs or basic insurance training provided honestly by an agent or through effective media.

Appropriate – reflecting the actual needs and abilities of the target market. For example, monthly premiums in a rural economy based on crop harvests will not lead to success; calculating premiums based on the risks of wealthy is also likely to lead to problems.

Valuable – to the policyholders because it responds to their needs and reduces the overall risk to the policyholder’s household at a fair price.

Efficient – structured so that the delivery channel and insurer can transact with the policyholder and each other with little effort and high effectiveness.

Module Content:  Methodology
Microsoft Office Word 2003 or higher version
reference
Adobe Reader 7 or higher version  Risk Management Strategies Illustration
reference
Microsoft Office PowerPoint 2003 or higher version  Risk Management Strategies Illustration
reference
Adobe Reader 7 or higher version  Rurak Banks and MI Regulations
reference
Windows Media Player 9 or higher version  RBAPS – MABS MI Orientation
video
Windows Media Player 9 or higher version  RBAP – MABS MI Training
video
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