Over 100 experts participated at the workshop.

Taking on mass poverty – Microinsurance in China

With its 1.3 billion people, China is the most populous country in the world. According to UN statistics, 35% of its people have to get by on less than two dollars a day. The remarkable economic growth of the past years has indeed helped millions of Chinese out of poverty, but the challenges remain great. The government has recognised the important role of microinsurance in the war on poverty and the China Insurance and Regulatory Commission (CIRC) held a conference on this topic in mid-January 2008.

Over 100 insurance experts met in Bejing on 16 and 17 January to discuss opportunities and perspectives for microinsurance in China. There is great interest in the topic, not least because the government has assigned microfinancing and microinsurance a prominent role in its programme for harmonial development of society. The focus here is on the 600 to 700 million people who live in rural regions and who, unlike the urban population, have largely been left behind in the economic boom. At the same time, the 400 million rural Chinese are in dire need of protection against the risks they face.

According to Li Kemu, Vice Chairman of CIRC, in 2007 China invested more than 2.7 billion yuan (the equivalent of some €255m) in subsidies for the development of insurances in rural regions. “We must heighten awareness of the needs of these income groups and develop more innovative coverage concepts,” Li Kemu demanded. Use of existing marketing channels such as postal or postal banking institutions could take on special significance. He also appeals to insurers to establish branch offices in rural regions.

Michel Flamée, Chairman of the International Association of Insurance Supervisors, advocated adapting the legal framework for microinsurances to existing situations. “Insurances must cover all income groups. It is therefore important for insurance regulatory authorities to gain a better understanding of the requirements of microinsurance and act accordingly,” Flamée stated.

Several speakers pointed out the special significance of cooperatives for improving access to microinsurance. Even if not all attempts in this sector have been inherently successful, the favourable cost-benefit ratio makes these beginnings promising.

As the focus is on the rural population, the topic of natural catastrophes must also be given due consideration. “Climate change will bring heavier flooding to some regions and severe droughts to others,” Dirk Reinhard of the Munich Re Foundation warned. This must be taken into consideration in developing microinsurances.

The conference in Beijing underscored the high level of commitment to insurance solutions for people on low incomes. The question of supervision still remains to be resolved. Although CIRC has announced special regulations for microinsurance, the conference provided no concrete details. In view of the enormous challenges involved, customised and sustainable microinsurance solutions can only be developed in China if authorities, insurance experts and those who have extensive knowledge of the country and its people work in close cooperation.

International Microinsurance Conference

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World Map of Microinsurance

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Microinsurance Compendium

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Agenda and conference documents

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