The path towards a viable and sustainable micro-insurance scheme

*The number of years for the micro-insurance provider to complete each ‘step’ would be dependent on the ability, dedication and motivation of the managers of scheme, the quality of the technical partner, membership size, good corporate governance and local regulatory requirements. In particular, the activities in the first few years will determine the success of the scheme as demonstrated by the diagram.

ª If the provider decided to aim for formalisation then it is envisaged that twenty years would be the longest period of time it should take to achieve legal status.


5.3. – The way forward

Years of subsidies and grants have not achieved any recognisable inroads into poverty alleviation. It is only recent investigation into the real reasons preventing sustainable growth out of poverty that the role of risk protection mechanisms has been acknowledged. There is a responsibility now for governments and international aid organisations to create an enabling environment for the development of social protection mechanisms to the poor. Long term solutions that build towards a better life for future generation are more beneficial to the cause of poverty alleviation than subsidies that support short-term measures. International agencies working with the poor such as ICMIF, WOCCU, ICA, CGAP, USAID and Freedom from Hunger need to collaborate and share information and projects to a greater extent. The onus is on industry experts and representatives such as ICMIF to form partnerships to investigate innovative ways to overcome the needs of the poor and make more modern risk transfer mechanisms such as commodity pricing, weather protection and crop insurance available and work in practice for the poor. The technical expertise and training facilities of organisations such as ICMIF should be used to support more microinsurance programs to become viable and sustainable. The overriding aim should be to get the most effective assistance to the most people in the most efficient way.

There needs to be greater involvement of the poor in guiding development projects and less reliance on national governments and academics who believe they know what the issues are. The poor desire to be empowered, they are in the best position and have the greatest determination to escape poverty, all they want is a fair chance to achieve it. Co-operative insurance, through the protection and solidarity it provides, and its pro-poor principles, empowers individuals to have the capability to secure a better future for themselves and for subsequent generations.