Microinsurance sifting to the top of people's priorities
According to Nextbillion.net, LeapFrog has established the first ever fund dedicated solely to investing in microinsurance (for more posts on the subject you can go here) throughout the world. Jim Roth, the fund’s founder, said that this $137 million fund will look to invest in the wide spectrum that has become microinsurance.“Driven both by local experiments, by cooperatives of microfinance institutions, and the involvement of larger, multinational insurance companies, the sector has developed. After the first wave of relatively easy products, like group-based life insurance, insurers are now looking to more complex issues: health, life-stock, or crop- and weather insurance for smallholder farmers.”
LeapFrog’s entry into the microinsurance space will likely be well received by India’s Finance Minister, Pranab Makherjee who has called for insurance agencies to provide more microinsurance products to rural customers. LeapFrog has stated that South Asia, and India in particular, is a major priority for them. In an effort to accelerate the impact that microinsurance can have on the world, the Microinsurance Network held its first meeting earlier this month in Germany. There entrepreneurs, major insurance companies, NGOs, and other organizations gathered to discuss issues including ““client protection, social performance, impact… public-private partnership, climate change and the need for a microinsurance marketplace.” Shortly afterwards, Dirk Reinhard, Vice Chairman of the Munich Re Foundation and member of the Executive Committee of the Microinsurance Network, said the following:
“Microinsurance has a huge potential and will play an increasingly important role in fighting poverty and helping the poor better cope with their risks. We strongly believe that we need to get the key stakeholders involved to overcome the many challenges: The regulation, policy and supervision experts need to provide a legal framework that facilitates the development of sustainable microinsurance products. The insurance industry has the insurance knowledge needed. The microfinance institutions, NGOs, co-operatives and self help groups know the demand and have access to the clients. Last but not least, we need donors to help finance the often very costly development and research necessary to come up with good solutions on how to serve the poor. We strongly believe that if one of these four groups is missing, the development of microinsurance will be much more difficult. The conference is the tool to get the players around the table and discuss the challenges and solutions.” [Source: Microcapital.org]
Hot of the heels of this initial meeting, a number of conferences have been sprouting up to be held in the following months. The MicroInsurance Summit Asia is to be held in the first week of August, and the 6th International Microinsurance Conference will occur in November in the Philippines.
Microinsurance has the potential to be a game changer, as it can help address many of the criticisms often levied on microfinance on its own. Virkam Akula, the founder of SKS Finance stepped away from the day to day operations of SKS so he could devote his energies to microinsurance products in 2008. Likewise other innovators are searching for this missing link in the financial puzzle.
