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)
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
LARGE MARKET
Find the large client base
Existing distribution platforms
Group enrollment
Certain lines of business test more profitably
Life more successful
Complex health not successful
LOW COST
Innovative operational structures
Many of these organizations have moved from studying microinsurance to practicing microinsurance.