Features
MSME insurance: how can insurers protect low-income businesses?
Micro, small and medium enterprises (MSMEs) are the backbone of many local communities, contributing substantially to employment and innovation. Their impact, however, is not confined to the areas in which they operate.
Accounting for 50% of global employment and 90% of all businesses, MSMEs are vital drivers of global economic growth. And yet despite this, many of them are underfinanced and underinsured. So what are insurers doing to help increase uptake of insurance among this valuable segment?
Rethinking the future of insurance
For centuries, the insurance industry has operated under a relatively straightforward business model; data is used to determine risks and underwrite policies, and premiums are then priced on the severity and likelihood of those risks. However, in a world where climate change is impacting our lives daily – both physically and financially – this approach is no longer enough.
Too many people are being priced out of policies, leaving them vulnerable and unprotected when a disaster strikes. For the global economy, this is not financially sustainable. To ensure uptake, insurers need to make insurance inclusive. But what approach works best? Is it through a “prevention is better than cure” approach? Or is it by tailoring products and making them more affordable?
Country Focus: Ghana
Although the insurance sector is small relative to GDP, the uptake of inclusive insurance in Ghana is relatively high and has been growing steadily thanks to consistent efforts and coordination by national and international stakeholders.
There are some encouraging signs of progress in terms of designing a favourable environment for microinsurance development – including a new Insurance Act from last year, which opens the door for innovative market development initiatives. – but more remains to be done to bring about inclusive insurance solutions for those most in need.
MiN, Members & Partners: Events
- International Conference on Inclusive Insurance 2022: 24-28 October 2022 | Kingston, Jamaica | Registration is now open
- AXA, Cenfri & FSD Africa: Holistic resilience solutions for Egyptian MSMEs | Monday, 22 August 3pm CAT | Register now
- UNEP-FI webinar series: Part 3 – Financing the circular economy applied to SMEs (in Spanish with English and Portuguese interpretation) | 24 August 2022 | register now
- ICMIF webinar: Leading with purpose and the future of our industry | 8 September 2022 4pm CEST
- ILO’s Impact Insurance Facility online course – Insurance for Development | 19 September-21 October
- A2ii & IAA: Q&A Special on ‘Leveraging Actuarial Skills’ | 27 September 2022 1-2:30pm CEST | Find out more
- Fintech for Inclusion Global Summit 2022 | 3 November 2022 | Register now – early bird period ends 31 August
MiN, Members & Partners: News, Blogs, Jobs & Resources
- MiN: Inclusive insurance in El Salvador | download now
- MiN: Inclusive insurance in Ghana | download now
- A2ii: Index insurance best practices for insurance regulators and practitioners in the Pacific Island countries
- ADA: Digital solutions for smallholder farmers – SSNUP workshop results
- Blue Marble is recruiting for multiple positions – find out more and apply now
- Cenfri: Insurance Innovation Dialogue | view presentation
- Democrance named finalist for People’s Choice Award of Swiss Re Foundation’s Entrepreneurs for Resilience Awards
- Programa de Seguros Inclusivos de la Fundación PROFIN: Una serie de artículos
- ILO’s Impact Insurance Facility & Fasecolda – Co-financing fund for inclusive insurance initiatives in Colombia: what can we learn?
- InsuResilience: Call for applications – advisory support on gender-smart monitoring and evaluation | Deadline: 31 August 2022 | apply now!
- Milvik Indonesia benefits from launch of Ayoconnect API for recurring payments capabilities
- WFP: Parametric microinsurance – a key tool to achieve resilience in Guatemala
- Women’s World Banking: 2021 Impact Report | download now
- Women’s World Banking: CEO Mary Ellen Iskenderian named one of Credit Suisse’s Pioneers of Progress
- World Bank seeking a Senior Financial Sector Specialist with a focus on insurance | Apply now – deadline: 25 August
Elsewhere in the sector...
- CCRIF’s member governments purchase USD 1.2 billion in coverage for cat risk insurance against climate-related and seismic hazards
- How governments can drive demand for crop insurance while protecting their own and their farmers investments - Evidence from Zambia and Kenya
- ICMIF: Building the foundations for a sustainable future through mutual microinsurance
- FAO: World review of capture fisheries and aquaculture insurance 2022 | download report
- Insurance & Innovation podcast: Making payments frictionless
- ISF Advisors: Updating our understanding of digital marketplace platforms
- Rural Inclusion: What happens if you don’t claim on your insurance?
- Turaco has job openings across Africa | apply now
- UNCDF: Diagnosing gendered social norms can unlock pathways for achieving women’s financial health outcomes – insights from India
- UNCDF: Insurance and pensions – charting the path for migrant financial resilience