MicroEnsure: Insurance Preventing Extreme Poverty

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SEATTLE, Washington — Unfortunate events happen everywhere in the world. In developed regions with insurance markets, insurance companies handle misfortune through rather straightforward processes. For poorer communities without insurance, an unfortunate event means sinking into extreme poverty. According to the World Health Organization, in 2017 more than 100 million people faced extreme poverty due to health expenses. Luckily, microinsurance can be a solution as a type of insurance preventing extreme poverty.

Microinsurance provides coverage to low-income families who lack resources. It supports families where insurance markets are non-existent and in turn, can offer coverage that meets their needs at a low premium. It also covers various risks including term life, health, death, disability and even livestock coverage.

MicroEnsure

One innovative company leading the way in microinsurance is MicroEnsure. Richard Leftley, the CEO and founder of MicroEnsure, says that it is intended to be an option for vulnerable people. His mission is to help the people that need it most when unfortunate events occur. The organization does this by providing insurance solutions for people living on less than $4 a day in Asia and Africa. MicroEnsure offers over 200 types of coverage including life, accident, health and political violence.

Innovations

MicroEnsure leads the way with their “client-centric approach” to understand low-income populations and how they deal with various risks. Representatives from the organization visit these communities to understand and develop solutions around a community’s specific needs. They recognize that most low-income communities do not have trust in insurance companies and 85% of their customers are getting insurance for the first time. As a result, they give confidence to their clients by partnering with companies their clients already trust, such as mobile phone airtime companies and microloan firms.

In many impoverished regions, banks are too far or people are without bank accounts altogether. MicroEnsure circumvents this issue by working with local mobile money markets. Claim payments can be cashed-out to the client’s mobile wallets. They also established a 72-hour turnaround time for claim processing. In one case, a claim was processed in less than 7 hours.

Currently serving over 56 million customers in 20 countries, they not only make insurance coverage an option for the poor but they have molded the way insurance operates around the needs of developing countries. When they started to insure communities in Pakistan, many people didn’t know how old they were due to lack of or incorrect records. MicroEnsure worked hard to convince life insurance firms to create coverage plans without age limits, becoming the first to offer coverage without age restrictions and exclusions.

Expanding the Insurance Preventing Extreme Poverty

MicroEnsure aims to expand its reach and its products. They recently introduced new forms of insurance solutions including protection for political violence, crops, micro-health and mobile insurance. The more reach they have, the better people facing extreme poverty can manage their situation.

Mainstream insurance does not address the fundamental needs of people in developing countries who have more risk. Even the smallest of incidents can have disastrous long-term effects on the impoverished, making insurance preventing extreme poverty all the more necessary. Thanks to companies like MicroEnsure, low-income populations have access to simple, cost-effective protection and can file claims easily with immediate support.

– Tara Hudson
Photo: Unsplash

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