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Micro insurance ''Helping the poor weather life's storms''
Category: Social Development | By RAGM, 7-Jul-2011 | Viewed 3319  Comments 0
147_778723981_4.jpgMany folks interested in microcredit wonder about the growth of ancillary or adjunct businesses. Micro insurance is one such service. It is alive and well as shown by MicroEnsure's award on 16 June 2011 from the global FT/IFC Sustainable Finance Awards committee. MicroEnsure (http://www.microensure.com/) has a world wide portfolio that is growing at 100,000 new clients per month. The innovative insurance payment scheme in Ghana operates in conjunction with mobile phone payments. 

147_712168534_4.jpgMicroEnsure's submission was based on its pioneering work providing life insurance products with two leading Ghanaian mobile phone providers. Growing rapidly, MicroEnsure's products are expected to double the number of Ghanaians served by insurance by the end of 2011.

Because less than 2% of Ghanaians have a life insurance policy, families typically sell assets, use savings, and rely on donations and loans to finance funerals. When a family is not able to cover its expenses, the women and children are often the first to be affected; children are removed from school and the women and children forego proper nutrition and healthcare, leading towards a downward spiral into poverty.

With the rapid growth of mobile financial services, MicroEnsure identified a significant opportunity to meet the demand for insurance among the poor. The first model is tied to mobile payment platforms where the subscriber chooses to buy insurance and pays small premiums each month on an automatic, recurring basis. The second model is a frequent-user model, where the subscriber is rewarded with increasing levels of life insurance based on the amount of airtime used over the course of a given month. The mobile network operator is willing to pay the premium, as they profit from increased usage.

Part of MicroEnsure's motivation for this model is to get millions of people to have a first experience of insurance through a simple, low-cost policy. Once customers have a positive first experience with insurance, they will be more likely to increase their reliance on insurance in general, in order to protect themselves from risk.

Martin Fuller, Chief Operating Officer of MicroEnsure commented; "We are delighted that our pioneering work has been recognised once again at the FT/IFC Sustainable Banking Awards. At MicroEnsure we are always seeking new and innovative ways to help vulnerable families through the provision of low cost insurance products. Our work with the mobile network operators has helped us to expand our offerings to many of the world's poor that we would have been unable to reach through traditional means and as a result we are now growing globally at a rate of over 100,000 new insured people per month."

147_855221377_4.jpg
Opportunity International - http://www.opportunity.org/
The strength of microcredit and related services lies in providing low cost products like micro insurance for large numbers of clients to compensate for the micro nature of the average person's purchases. MicroEnsure, a subsidiary of Opportunity International, was established in 2005 as a microinsurance intermediary. Opportunity International is an organization that provides small business loans, savings, insurance and training to more than two million people working their way out of poverty in the developing world. It serves clients in more than 20 countries and works with fundraising partners in the United States, Australia, Canada, Germany and the United Kingdom.
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