Inclusive Insurance (Microinsurance)
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||Assessing Risk and Proportionate Actuarial Services in Inclusive Insurance Markets — An Educational Paper and Toolkit - November 2018 - Around the world, people from a low-income
background are vulnerable to a variety of risks due to their working and
personal conditions. They often face the risk of falling into hardship due to
the lack of social safety nets. If structured appropriately, insurance can play
an important role in helping low-income people manage such risks. This is the
context of inclusive insurance, which encompasses microinsurance. The goal of
inclusive insurance is to provide financial protection against risks in a way
that is affordable, sustainable, responsible and accessible by all types of
customers, particularly customers from a low-income background.
This educational paper
and toolkit fulfil the recommendation in the IAA Issues Paper “Addressing the Gap in Actuarial Services
in Inclusive Insurance Markets”, by addressing three key questions regarding the
application of proportionate actuarial services in inclusive insurance:
- How does one identify
the key insurance risks in terms of a product or a provider?
What actuarial or other
advice or services are needed to manage these risks?
- What level of
actuarial skills, if any, is needed to deliver the actuarial advice or service?
This paper is an outcome of a joint project
between the IAA and the International Association of Insurance Supervisors
(IAIS) to develop frameworks to support the proportionate prudential regulation
and application of proportionate actuarial services in inclusive insurance
markets. This paper should be read in conjunction with the expected IAIS
Toolkit Contents: Tool / Health & Life Product / Mobile Hospital Cash Product / Social Health Product
Webinar #1 (Background) Recording: Webinar #2 (Practical Experiences) Recording:
Addressing the Gap in Actuarial Services in Inclusive Insurance Markets —This paper outlines the current context and challenges in providing qualified actuarial resources in microinsurance markets and proposes a number of suggestions intended to address these challenges. The paper also explores avenues for further development and collaboration between the IAA and IAIS in this area. The paper identifies a number of key issues in inclusive insurance markets, such as:
- A need for suitably qualified or experienced professionals;
- Limited supply of actuarial capacity in microinsurance markets;
- A lack of understanding of the contribution that actuaries can make to microinsurance programs; and
- The importance of balancing supply and demand for actuarial services.