Volume II

Protecting the poor

A microinsurance compendium - Volume II

This second volume of Protecting the poor is a unique collection of recent practices and emerging ideas in microinsurance. It covers numerous innovations that have emerged in recent years to meet the challenges of providing insurance to low-income people, from new products and deliverychannels to consumer education tools, while examining changes in regulations, providers andschemes. As the microinsurance community dramatically evolves and millions more low-income households have access to better insurance cover, this timely second volume will be an invaluable resource for policymakers, insurers, academics and NGOs.



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- Acknowledgements
- Table of Acronyms
- Introduction
(Craig Churchill and Dirk Reinhard)

Part 1

Emerging issues
Current trends in microinsurance
(Craig Churchill and Michael J. McCord)
1.1 The definition of microinsurance is becoming operational
1.2 More low-income households are covered by insurance
1.3 Stakeholders in microinsurance are becoming more diverse
1.4 Providers are offering an expanding and varied range of products
1.5 There is greater concern that insurance provides value to the insured
1.6 Conclusion
The potential of microinsurance for social protection
(Yvonne Deblon and Markus Loewe)
2.1 Scope and functions of social protection
2.2 Social protection in developing countries
2.3 Microinsurance as a social protection tool
2.4 Conclusion: The need for a systematic approach
What is the impact of microinsurance?
(Ralf Radermacher, Heidi McGowan and Stefan Dercon)
3.1 What is impact?
3.2 The current literature
3.3 Expected and observed impact of microinsurance
3.4 Conclusion
Microinsurance and climate change
(Thomas Loster and Dirk Reinhard)
4.1 The impact of climate change
4.2 Microinsurance and weather events
4.3 Operational challenges and solutions
4.4 Role of key stakeholders
4.5 Conclusion
Part 2
Health insurance
Innovations and barriers in health microinsurance
(Sheila Leatherman, Lisa Jones Christensen and Jeanna Holtz)
5.1 Evidence of the impact of health microinsurance
5.2 Demand and supply challenges for health microinsurance
5.3 Innovations and interventions for health microinsurance
5.4 The way forward
Third-party payment mechanisms in health microinsurance
(Pascale LeRoy and Jeanna Holtz)
6.1 Current TPP practices
6.2 Establishing and managing a TPP mechanism
6.3 Conclusions
The elusive quest for estimates of willingness to pay for health microinsurance
(David Dror and Ruth Koren)
7.1 Methods of eliciting WTP
7.2 Search of relevant WTP experiments
7.3 Key findings
7.4 Lessons learned and implications for practitioners
Part 3
Life insurance
Savings in microinsurance: Lessons from India
(Rob Rusconi)
8.1 Saving and insurance considerations
8.2 Products considered
8.3 Key lessons learned
8.4 Concluding thoughts and way forward
Improving credit life microinsurance
(John Wipf, Eamon Kelly and Michael J. McCord)
9.1 What is credit life insurance?
9.2 Who benefits from credit life?
9.3 Quantifying the value of credit life
9.4 Existing expanded products
9.5 Operational aspects
9.6 Conclusions and recommendations
Funeral insurance
(Christine Hougaard and Doubell Chamberlain)
10.1 Funeral cover matters
10.2 Key characteristics of funeral cover
10.3 Delivering value
10.4 Conclusion
Part 4
General insurance
Designed for development impact:Next-generation index insurance for smallholder farmers
(Michael R. Carter)
11.1 Agricultural index insurance basics
11.2 Designing contracts to minimize basis risk
11.3 Interlinking insurance and credit
11.4 Conclusion: Designed for development impact
Appendix: Simulation analysis index insurance versus self-insurance
Livestock insurance: Helping vulnerable livestock keepers manage their risk
(Anupama Sharma and Andrew Mude)
12.1 Why livestock insurance?
12.2 Livestock insurance provision to the poor
12.3 Difficulties in providing livestock insurance
12.4 Catalysing the market: Innovations to make livestock insurance viable
12.5 Conclusion
Part 5
Insurance and the low-income market
The psychology of microinsurance: Small changes can make a surprising difference
(Aparna Dalal and Jonathan Morduch)
13.1 Small changes can make a surprising difference
13.2 Strategies
13.3 Conclusion
Emerging practices in consumer education on risk management and insurance
(Iddo Dror, Aparna Dalal and Michal Matul)
14.1 Content of consumer education
14.2 Delivery of consumer education
14.3 Sustainability and business model for consumer education
14.4 Conclusion
Improving client value: Insights from India, Kenya, and the Philippines
(Michal Matul, Clémence Tatin-Jaleran and Eamon Kelly)
15.1 Client value assessment framework and tool
15.2 Value-creation opportunities
15.3 Setting benchmarks: Informal mechanisms and social security schemes
15.4 Relative value from products at the country level
15.5 Conclusions
Microinsurance that works for women
(Anjali Banthia, Susan Johnson, Michael J. McCord and Brandon Mathews)
16.1 Gender and risk in poor households
16.2 Traditional risk management and coping strategies
16.3 Gender-sensitive microinsurance
16.4 Conclusion: A call to action
Formalizing the informal insurance inherent in migration: Exploring potential links between migration, remittances and microinsurance
(Jennifer Powers, Barbara Magnoni and Emily Zimmerman)
17.1 Demand considerations for migration-linked insurance
17.2 Framework: The 3Hs of migration-linked insurance
17.3 Legal and regulatory challenges
17.4 Operational opportunities and challenges to migration- and remittance-linked insurance
17.5 Conclusion
Part 6
Insurers and microinsurance
Is microinsurance a profitable business for insurance companies?(Janice Angove and Nashelo Tande)
18.1 Framework for the assessment of profitability
18.2 Context and setting the scene
18.3 Financial analysis and drivers of profitability
18.4 Conclusions and recommendations
Teaching elephants to dance: The experiencesof commercial insurersin low-income markets
(Janice Angove, Martin Herrndorf and Brandon Mathews)
19.1 Involvement of commercial insurers in microinsurance
19.2 Internal organization: Models for success
19.3 External outreach: Building market relations
19.4 Conclusion
State and market synergies: Insights from India’s microinsurance success
(Rupalee Ruchismita and Craig Churchill)
20.1 Industry overview
20.2 Products
20.3 Distribution channels
20.4 Conclusion: Catalysts of success
Pricing of microinsurance products
(Denis Garand, Clémence Tatin-Jaleran, Donna Swiderek and Mary Yang)
21.1 The pricing cycle
21.2 Gather and analyse data
21.3 Setting assumptions
21.4 Determining the premium
21.5 Monitoring and evaluating product experience
21.6 Refining the premium
21.7 Summary example
21.8 Conclusion
Part 7
Delivery channels and intermediaries
New frontiers in microinsurance distribution
(Anja Smith, Herman Smit and Doubell Chamberlain)
22.1 Rethinking distribution
22.2 Comparing the distribution channels
22.3 Emerging themes
22.4 Moving forward
Microinsurance intermediaries
(Alex Bernhardt, Roland Steinmann and Michael J. McCord)
23.1 Insurance intermediation: Conventional vs. micro
23.2 Microinsurance-only intermediaries
23.3 Traditional intermediaries with some microinsurance activities
23.4 The value of microinsurance intermediation
23.5 Conclusions
Part 8
Infrastructure and environment for microinsurance
The technology revolution in microinsurance
(Anja Smith, Eric Gerelle, Michiel Berende and Grieve Chelwa)
24.1 Benefits and risks of technology in microinsurance
24.2 Client-interfacing technology
24.3 Transaction processing
24.4 Data analysis
24.5 The promise of mobile phones
24.6 Conclusion
Access to insurance and financial-sector regulation
(Arup Chatterjee)
25.1 Financial inclusion and insurance
25.2 Prudential role and developmental role – is there a trade-off?
25.3 Regulatory interventions through enabling policy frameworks
25.4 Treatment of MCCOs and informal providers
25.5 Recognizing alternative distribution channels
25.6 Access to insurance and consumer protection
25.7 Conclusion
Protecting consumers while promoting microinsurance
(Rodney Lester and Katharine McKee)
26.1 Microinsurance market characteristics relevant for consumer protection
26.2 Towards a consumer protection framework for microinsurance
26.3 Designing and implementing special consumer protection regimes for microinsurance
26.4 Non-legislative and non-regulatory consumer protection
26.5 Emerging good practices
- Appendix: About the authors
- Bibliography
- Index

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Protecting the poor - A microinsurance compendium

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> Volume II (English)

> Volume II (Portuguese)

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