Microinsurance, an emerging category of microfinance, works in a manner similar to traditional commercial insurance - except products are designed for and distributed to low-income populations, predominantly in emerging economies that have had historically low insurance penetration. Because this corner of the market is relatively new, many insurers find it difficult to write “micro” policies with little access to loss history, exposure data, and other essential underwriting information. Without access to reinsurance, the situation becomes even more challenging.
The microinsurance movement represents an effort to jumpstart a culture of utilization of insurance in the developing world by making coverage available where it would not exist otherwise. The microinsurance market holds huge growth potential for (re)insurers. Though accessing this potential requires a comprehensive, innovative and novel approach to new business development.
Guy Carpenter & Company, LLC will be partnering with Hanson Wade to bring together insurance experts from around the world at the Second Microinsurance Summit 2010, to be held in Miami on May 26 and 27. The Summit will address one of the major remaining challenges for (re)insurers: How can products be distributed so as to achieve sufficient scale while maintaining portfolio profitability?
The various issues relating to this overarching concern that will be addressed at the Summit include innovative distribution practices, educating clients on risk management, targeted product development, the role of regulation and related compliance issues and strengthening the corresponding IT infrastructure.
Aidan Pope, Chief Executive Officer of Guy Carpenter’s Latin America and Caribbean Operations, will lead a workshop at the Summit focusing on microinsurance in Latin America and the building of financial and technical capacity through risk transfer partnerships.
This session will address the following challenges:
- How to model for risk in microinsurance as typical models/actuarial tables will not apply
- Access to efficient and effective secondary risk transfer mechanisms
- Access to intellectual capital from across the micro(re)insurance supply chain
- Why micro(re)insurance and other enterprise risk management strategies are important
- Successful guidelines for capacity building
As a leader in the micro(re)insurance sector, Guy Carpenter continues to promote the need for and the opportunities within this innovative and growing arena with its partnership role in the Microinsurance Summit 2010, in Miami. 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 tremendous opportunity for those with a long-term view of new market development. We are committed to its success.
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.
Click here to view the Website of the Microinsurance Summit 2010 in Miami »
Click here to view all of Guy Carpenter’s materials covering microinsurance on GC Capital Ideas »