As a leader in the micro(re)insurance sector, Guy Carpenter continues to communicate the need for and the opportunities within this innovative and growing arena with its sponsorship of MicroRisk, a new quarterly publication devoted to the market for insurance products aimed at protecting low-income people. In the first issue of MicroRisk, MMC President and CEO Brian Duperreault discusses the viability of and challenges associated with microinsurance in “Big Hitters Eye Micro Opportunities.” Guy Carpenter Assistant Vice President Alex Bernhardt is mentioned in an article about catastrophe protection for low-income populations in the wake of the recent Haiti earthquake.
Microinsurance works in a manner similar to traditional commercial insurance - except products are designed for and made accessible to low-income populations, predominantly in emerging economies where insurance penetration is generally much lower than it is in developed markets.
Because this segment of the industry is relatively new, many insurers find it difficult to write “micro” policies because they have little access to loss history, exposure data, and other essential underwriting information. Reinsurers are encountering similar difficulties, and with little reinsurance capacity available to support primary policy issuance, new business development becomes even more challenging. However, the various barriers to sustainable market entry and expansion are surmountable and GC Micro Risk Solutions is committed to helping its clients and markets to access this important new market space.
While it is tempting to view microinsurance as a novelty, forward-looking participants see it as early market-entry in its purest form: the development of a revenue stream that does not exist currently. The microinsurance movement represents an effort to jumpstart a heretofore untapped segment of the insurance industry by making coverage available to those who have not had access to it. This effort involves designing coverages which cater to the unique needs of low-income insureds in developing nations. Through the establishment of an enabling infrastructure, carriers will conduct business more easily in new markets. More than goodwill, microinsurance is building the foundation for a larger, more viable and socially significant (re)insurance market in the future.
Guy Carpenter entered the microfinance sector in 2008, after being awarded a grant by the Microinsurance Innovation Facility to develop a reinsurance facility for microinsurance and microfinance company operations. We believe this burgeoning market provides our industry with the means to grow, and we are committed to its success.
There is a tremendous opportunity for those with a long-term view of new market development. Guy Carpenter invites other leaders to look more closely at the micro(re)insurance sector, and determine how to help develop the future of our industry.
Furthermore, Guy Carpenter encourages (re)insurance industry professionals to register for a complimentary three-month subscription to MicroRisk.