Gender Equity CoP Seminar

Gender and Microinsurance

Mayumi Ozaki
March 2011

The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank
(ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper
and accepts no responsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to
sovereignty or independent status or necessarily conform to ADB's terminology.
Women’s risk – If the husband dies
• Her husband died at the age of
40. She has three children.
• Her husband was an agricultural
laborer and had no land, house
or savings.
• She had to borrow SLRs80,000
to pay his funeral from a local
money lender.
• They have rented a house from
her husband’s relative. Now the
relative is requesting her to
vacate the house immediately.
• She has no work, no place to
go…….
Women’s risk – if you are ill…
• She is a single mother and her
husband died seven years ago.
• She is a member of a
microfinance institution and
borrowed NRs40,000 five years
ago to start a grocery shop.
• Last year she found that she is
contracted with hepatitis and it
costs her NRs30,000 per year
for medicine and fee for a
doctor.
• Because of her condition, she
cannot work now, but lives on
the savings from her business.
• She has one school-age child.
• She is wondering what to do
after she uses up all of her
savings…….
Women’s risk – if you are hit by
a disaster…
• She and her husband had a
half ha. of land and a few
buffalos.
• Before harvesting, they were
hit by a flood and all crops
were damaged.
• Their house also became
inhabitable.
• They have to repay to a local
money lender Rs20,000, the
money they borrowed for
seeds and fertilizer before
planting.
• But they have no other sources
of income……
Women’s risk – if you became a
victim of fraud…
• She and her husband had a
small plot of land and were doing
rice farming.
• One day, a foreign employment
agent came to the village
informing about a remunerative
job in the Middle East.
• Her husband decided to take a
chance but had no money to pay
to the agent.
• They sold the land and paid
Tk100,000 to the agent.
• But the agent disappeared and
they haven’t heard from him
since then.
• They now lost their land and
don’t know what to do……..
 Microinsurance is not …..
• Charity
• Risk prevention
• Loss prevention
• Small insurance company
• Down-sized insurance product
• “MAGIC BULLET” and a cure for all
problems of the poor people
 Microinsurance is …….

• Risk management
• Financial compensation in the event of a
loss
 Microinsurance Clients

P
O
V
E
Extreme Moderate R Vulnerable Non- Poor Wealthy
Destitute Poor Poor T Non- Poor
Y

L
I
Not insured Micro- N
Traditional
by anyone Insurance E Insurance
Clients Clients
 Microinsurance Products
• Life/Disability/(w Endowment)
• Health/Critical Illness
• Property/Asset
• Crop/Livestock/Weather
• Funeral
• Integrated
 How insurance works….
Clients Insurer Reinsurer

•Subscribe policy •Marketing

•Submit claims •Underwrite a
policy
•Distribute policies •Covers insurer for
•Collect premiums catastrophe risk,
•Verify a claim claims incident risk,
•Payout benefits irregular claim
patterns, etc.
How to deliver microinsurance….
Full Insurer Model

Clients Insurers Reinsurer

How to deliver microinsurance….
Reinsurer
Partner-Agent Model

Clients Microfinance Institutions

(MFIs)

Insurer

•Subscribe policy •Marketing

•Submit claims •Education
•Distribute policies •Underwrite a policy
•Collect premiums •Verify claims
•Distribute benefits •Payout benefits
How to deliver microinsurance….
Cooperative/Mutual Model
Clients: Cooperative Cooperative Insurer
members

•Subscribe policy
•Submit claims
•Marketing
•Education
•Distribute policies
•Collect premiums
•Distribute benefits
•Underwrite a policy
•Payout benefits
•Verify claims
Reinsurer
 How to deliver microinsurance….
Community Based Model
Community
Clients Service Provider Based Groups

•Subscribe policy Provide specific •Underwrite a policy

•Submit claims services •Collect premiums
•Receive services covered by policy (i.e., •Provide services
health care) •Verify claims
•Payout benefits
 Issues in Microinsurance for
Women
• Limited financial literacy, numerical, and other skills
• Lack of marketing and distribution channels
• Difficulty in drop out management
• Hard to collect regular premium payment
• Little pregnancy/maternal care coverage
• Difficulty in making wife/daughter as beneficiary
VEMO SEWA

- Originated from “Self-Employed

Women’s Association
- Currently have 120,000 policy holders,
of which more than 60% are women
- Offers life, hospitalization, accidental
death, asset and spouse’s accidental
death insurance
- Provide “family coverage” package and
give discounts of premiums for smaller
families (reproductive health program).
- Provides composite
insurance (life, accidental death,
health, and asset) to its members
with the premium of Rs150/month.
- Organize village health camps
and have retainer hospitals.
- Also provides health education to
women and adolescent girls.
- Established “Sugam Fund” with the
premium of Rs5 by each members
to cover pregnancy and maternal
care.
- Established a partner-agent model
between HNB Assurance and SEEDS
- Provides a composite insurance of
life, hospitalization and funeral
- Provides family coverage
- 307 policy holders, all of them are
women
- Also started “Loan Risk Assurance
Benefit Fund” to provide
compensation in case of death and
disability during the loan repayment
 Some Recommendations
• Promotion of social protection
• Financial literacy training and capacity
development
• Legal and regulatory reform
• Infrastructure development
• Microinsurance service reforms
Thank you.