According to new research released by the Munich Re Foundation and GIZ, the microinsurance sector in Asia and Oceania has reached 172 million lives and properties covered, representing a 40% annual growth rate between 2010 and 2012. India is leading the market at over 100 million, whilst Malaysia and Indonesia emerge as having the most vibrant microinsurance markets with a growth rate of 185% and over 100% respectively, over the same time period.
Despite these encouraging achievements, the microinsurance sector today covers less than 5% of the people living in Asia and Oceania. “When low-income people are unable to manage risk, they cannot break out of the cycle of poverty” says Craig Churchill, Chair of the Microinsurance Network and Head of ILO’s Microinsurance Innovation Facility. For this reason, “access to effective insurance by low income people is essential to sustainable development.”
Currently life insurance is the main risk for which people are covered (83m), followed by accident (77m), health (27m), agriculture (26m), and property (7m) insurance.1 In addition, over 1.6 billion are estimated to be covered by subsidized schemes referred to as “social microinsurance” or social protection schemes.
“Market-based microinsurance needs to be complemented by schemes with governmental involvement to increase outreach, especially in the field of agriculture and health. It is important that approaches based on insurance principles are being developed jointly, involving the insurance industry, regulators and client representatives, as well as donors,” comments Dirk Reinhard, Vice Chairman of the Munich Re Foundation
Capacity development along the value chain is a key factor for the sector going forward. According to Dr. Antonis Malagardis, Programme Director of the GIZ Programme 'Regulatory Framework Promotion of Pro-poor Insurance Markets in Asia' (RFPI Asia) “The capacity development strategy of RFPI Asia prioritises the development of trainers and experts on inclusive insurance regulation, particularly in key areas such as agriculture, disaster risk management, SMEs and Islamic insurance.”
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