Responsible Finance Forum

Lessons Learned and Recommendations for Donors Supporting Microinsurance

Taara Chandani
01 September 2008
Source:  USAid

Microinsurance is the provision of insurance services to low‐income people, who typically do not have access to insurance or to adequate social security services. Microinsurance is receiving increasing attention from donors as an effective strategy for helping the poor to cope with risks, reduce vulnerability, and build their asset base. This Note offers operational guidelines for donors as they construct a road map for entering or for getting more deeply involved in the sector. It recognizes that donors have different approaches in working with the sector—some more hands‐on than others—and thus, it offers a broad framework that can be applied as needed. Donors include bi‐lateral and multi‐lateral agencies, regional development banks, development finance institutions, social investors, and foundations.

A handful of donors have been at the forefront of microinsurance, implementing programs, documenting lessons, and developing tools for more effective donor involvement. Although donors will not necessarily be the driving force behind increasing access to insurance services, they do have an important role to play. As more donors become involved, they can contribute to generating knowledge, strengthening the capacity of various actors within the microinsurance supply chain, serving as neutral brokers and advocates, and setting a pro‐poor policy agenda.

Donors need to consider the total insurance market when designing their interventions, while remaining centered on the needs of the client. This Note analyses the microinsurance market along the client, the micro, the meso, and the macro levels. The Notes examines 1) how donors have supported microinsurance to date, and 2) how they can enhance their effectiveness. It offers Lessons Learned and Recommendations.