Full Publication

Microinsurance is a unique topic for a Lloyd’s 360 Risk Insight report. Usually, we advise businesses on managing emerging risks but this report focuses more on opportunity than emerging risk.

Produced by Lloyd’s and the MicroInsurance Centre, this report sets out the understanding, mechanisms and partnerships needed to deliver insurance to three billion low income individuals across the globe, and how this will bring benefits to both the developing world and the insurance industry.

Microinsurance is not charity, it is business, but it will require insurers to change their mind-set. How do you sell insurance to someone who has never heard of the concept? How can you adjust claims in remote and inaccessible parts of developing countries, and most crucially, how can you make any money from a policy where the premium is just a few dollars a year?

In many ways, microinsurance challenges insurers to go back to their roots and find quick, cheap, simple ways to provide cover for people who have little money.

The report doesn’t pretend that there is easy money to be made in microinsurance. Currently profits are modest, but there is the potential for significant returns in the future. And there are other benefits to the commercial insurer, ranging from developing innovative new policies to building a brand and client base in economies that have largely been untapped. Today’s low income communities in China, India or Latin America could be tomorrow’s affluent consumers.