Microinsurance
Zurich provides microinsurance cover in Bolivia
Eliminating poverty is one of the defining challenges of society. Initiatives are under way to help disadvantaged sections of the world's population protect their incomes and their future.
For hundreds of millions of low-income families, insurance and other financial services are too often unknown, not appropriate or beyond reach.
Nonetheless, risk and opportunity shape life's course whatever one's income level. Insurance already provides fundamental security to many, and Zurich works to extend this security to many more through its Global Microinsurance initiative.
We have partnered with government and non-governmental agencies, multilateral organizations and academic institutions to identify the best and most promising developments in this field.
Microinsurance combines the core skills and sophistication of insurance and risk management with new learning, research and innovation in order to serve low-income populations appropriately and expediently. Its aim is sustainability; products and services must produce benefits for the customer in a commercially viable way for the provider.
Zurich first sold microinsurance in Bolivia in 1999, working closely with Banco Sol, a leading microfinance institution. In the years since, we established initiatives organically in other Zurich markets. In emerging economies, the bulk of the population is at the bottom of the economic pyramid, and selling services to these households is a logical growth strategy.
Global team
Early in 2007, we established a Global Microinsurance team marshalling our insurance expertise and global reach to develop the concept and the skills required more rapidly. The initiative has three basic strategic aims:
- Sustainable financial growth: entering new markets and establishing business with underserved economic segments
- Process and product innovation: rethinking value chains and developing better ways to reach more people
- Societal engagement: proactively offering Zurich's skills and abilities to address the challenge and the promise of greater financial inclusion.
We have partnered with government and non-governmental agencies, multilateral organizations and academic institutions to identify the best and most promising developments in this field.
In February 2007, we signed a public private partnership with the Swiss Agency for Development and Cooperation and the International Labour Organisation. This arrangement directly provides technical assistance to projects in Bolivia, South Africa and Venezuela, as well as strategic planning support for other business units exploring opportunities to develop microinsurance. Noteworthy projects include product development and distribution projects in the Royal Bafokeng Nation in South Africa, research into demand in South Africa and Venezuela, and a review of key learnings in Bolivia.
We partnered this year with government and non-governmental agencies, multilateral organizations and academic institutions, identifying the best and most promising developments in the field. We began active participation in the joint working group on microinsurance established by the Consultative Group to Assist the Poor and the International Association of Insurance Supervisors.
We have also been active in the Swiss Microfinance Forum and exchanged insights in bilateral sessions with other progressive regulatory bodies. We began a financial education pilot with Microfinance Opportunities in South Africa, education being a critical component of microinsurance success. We engaged our International Advisory Council (IAC) on the subject, gaining strategic insights from a variety of stakeholders and publishing a paper on economic inclusion entitled 'What is the role of insurance in economic development' written by IAC member, Lael Brainard.
Distribution experiments
In Latin America, Africa, and Greater China, the business of growing microinsurance continued during 2007. New coverage and distribution experiments were launched: property and casualty, health and life insurance covers, distribution through remittances and direct selling. Some of these were incremental innovations and others were bolder. We recognize that constant improvement and learning are fundamental elements of this initiative and that through these disciplines, the chances to make quantum leaps improve.
Our employees are proud of the good that our products do for customers. Microinsurance leverages this pride, applies our organization's skills and aims to expand the pool of people gaining real benefit and financial security from insurance in a changing world.
