Despite strong growth in microinsurance, an 88% protection gap remains, with 9 out of 10 people globally remaining unprotected from rising risks – including climate change, health crises, disasters, conflict, and nature loss – according to a recent report by the Microinsurance Network (MiN).
The Landscape of Microinsurance 2024’ report, done in collaboration with the United Nations Development Programme’s Insurance and Risk Finance Facility (UNDP IRFF), drew on data from 294 insurers across 37 countries.
Participating countries in the study include Africa, Latin America & the Caribbean, and Asia & the Pacific region, and it covered 985 microinsurance products offered in 2023.
According to the report, microinsurance has been increasingly used as a tool to build financial resilience, particularly in response to climate risks, economic shocks, and health-related uncertainties.
The number of people covered by the reported products has increased by 70% over the past three years, reaching 344 million across 37 countries in three regions. For the year 2023, these products generated $6.2 billion in written premiums.
Despite this, the report also revealed that only 12% of the estimated 3 billion people who could benefit from microinsurance are currently covered, leaving an 88% protection gap.
Lorenzo Chan, President and CEO of Pioneer Inc. and Chair of the Microinsurance Network Board, commented: “Microinsurance continues to grow, but sustained investment is needed to improve scale and sustainability. We applaud the significant strides that the Landscape of Microinsurance has made so far, reflecting the industry’s commitment to expanding financial protection for underserved communities.
“However, momentum must continue. Insurance providers and distributors should focus on developing products that address evolving needs while ensuring simplicity, affordability and accessibility. We also urge improvements to claims ratios and payment times, which are critical to earning the trust of vulnerable communities.”
According to the report, the microinsurance market has huge potential. Analysts estimated that around 3 billion people in the 37 countries included in the study represent approximately
$41 billion in microinsurance premiums.
Moreover, MiN also stated that for the first time in the Landscape study, data was collected on premium subsidies, revealing their central role in agriculture insurance, where 58% of products receive some subsidy.
This underscores the opportunity for subsidies to accelerate the development of other product lines, such as property and income insurance.
Matthew Genazzini, Executive Director of the Microinsurance Network, emphasised collaboration between stakeholders: “To expand microinsurance coverage, public-private partnerships are crucial to facilitating scale and reaching the most vulnerable. Governments and insurers must work together on targeted subsidies to support risks that low-income households cannot afford on their own, particularly climate risks.
“At the same time, improving data systems and sharing will foster market competition, ultimately leading to more innovative and sustainable microinsurance solutions. By working collectively, we can enhance affordability, accessibility, and trust in microinsurance, ensuring it meets the evolving needs of those who need it most.”
The report was completed with the support of support from Luxembourg’s Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade, Luxembourg’s Ministry of Finance, AXA EssentiaALL, Munich Re Foundation, Barents Re, Swiss Re Foundation, AON Philippines, and the Insurance Federation of Egypt.
The post 88% protection gap persists despite growth in microinsurance coverage: MiN appeared first on ReinsuranceNe.ws.