MicroEnsure profile
WHAT IS MICROENSURE?
MicroEnsure is an insurance broker dedicated to serving
extremely poor households with an affordable and suitable range of
insurance products. We seek to work in partnership with
organizations that are currently serving the poor such as
microfinance organizations, rural banks and SACCO's, as well as
humanitarian organizations that are serving the poor with
non-financial services. In addition to providing services to the
poor through existing networks, we also seek to develop direct
sales distribution methodologies that utilize technology to
minimize transaction costs.
As well as being involved in the distribution of insurance
products to the poor, we also engage in the design of the products
that are sold and the back-office administration of those products.
We have discovered that we are in the position to design suitable
products that the poor can understand, and that it is in our
interest as a broker to play a role in designing products that are
very scalable. We have also found that, with an average premium of
$1 to $2 per month, minimizing the cost per transaction is
critical. As a result we have developed significant
back-office administrative capability which, coupled with our
scale, allows a wider range of sustainable products to be
offered.
MicroEnsure has its roots within Opportunity International, a
large microfinance network. We began working in 2002 on the
development of a range of life, agricultural, and health insurance
products. Now as MicroEnsure, we currently serve some
3,500,000 people and have subsidiary offices in five developing
countries.
In addition to running a global insurance brokerage business, we
also provide consultation in product design and implementation both
for microfinance organizations in countries where we do not have an
operation and also for large donor groups. For example, we
serve in a project management capacity for the World Bank's African
crop insurance derivative programme.
HOW IS MICROENSURE STRUCTURED?
MicroEnsure operates as a wholly-owned subsidiary of Opportunity
International.
In 1992, Opportunity International began to focus on serving
poor entrepreneurs at even lower levels of poverty. The Women's
Opportunity Network was formed and started an innovative
group-lending methodology called the Trust Group. Trust Groups
bring together 15 to 40 poor entrepreneurs who guarantee each
other's loans. Members meet weekly with loan officers to repay
their loans and receive business and personal development
training.
In 1998, the Opportunity International Network was formed. Funds
from individuals, governments, corporations and foundations funnel
into the Opportunity International Network, which operates 43
programs in 27 developing countries in Africa, Asia, Eastern Europe
and Latin America. These programs are led, managed and staffed
largely by indigenous professionals who understand the culture of
the people they serve and the challenges and opportunities of the
local marketplace.
In 2000, Opportunity International began establishing
full-service microfinance banks for the poor, allowing clients to
earn interest on savings in a safe, secure location, in addition to
gaining access to its credit facilities. To date, Opportunity
International has built 17 such institutions in 16 countries.
Today, Opportunity International serves more than one million
loan clients. For more information, visit
http://www.opportunity.net/.
MicroEnsure operates as a holding company structure with its
head office located in Oak Brook, Illinois and fully owned
subsidiaries in the countries of operation. The Global Operations
Office in Cheltenham, UK, provides all technical and strategic
leadership to the subsidiaries which operate as local relationship
managers and data processing centres. MicroEnsure subsidiaries are
incorporated as local businesses and regulated as insurance agents
or brokers working with locally regulated insurance companies.
Richard Leftley, President of MicroEnsure, joined Opportunity's
technical support team in January 2002. He previously worked as a
reinsurance broker for Benfield Greig Ltd, the world's largest
independent reinsurance broking group. He leads a team of
specialists who provide technical training and start-up assistance
for our micro-insurance efforts. MicroEnsure subsidiaries are
currently located in Uganda, Ghana, Tanzania, India, and the
Philippines. We seek to open a minimum of three new countries per
year with initial focus on Africa and Asia.
WHAT PRODUCTS CAN BE PROVIDED?
MicroEnsure works with its local insurance company partners to
develop a full range of products to meet the needs of its clients.
To date we have developed products for over 25 microfinance
organizations in ten countries. Those products currently serve in
excess of 3.5 million active clients and broadly fit the following
categories.
CREDIT LIFE
The most basic of products protects the lending institution
against the inability of the borrower to repay the loan as a result
of death or disability.
TERM LIFE/FUNERAL
Provides a fixed payout upon the death of the client, spouse, or
children during a fixed period. The payout is normally designed to
pay for the cost of a funeral and provide a sum to the bereaved
family to provide for immediate needs. This product can also be
extended to include coverage for disability on a permanent or
temporary basis as well as critical illness coverage
PROPERTY
Cover for losses arising from a range of perils including fire,
natural disasters, flood, wind and even theft. This product is
especially useful for microfinance lenders providing secured loans
to individual borrowers.
WEATHER INDEX CROP
Lending to smallholder farmers is often considered too risky due
to the possibility of a climatic event such as a drought making it
impossible to repay a loan. Crop insurance products can be designed
that use an index such as rainfall to determine if and when a
payout is due. This product protects the farmer and the lender and
so enables rural credit programmes to expand with reduced risk.
PACKAGE POLICY
This combines a number of products to meet a specific need; an
example from Uganda uses credit life, funeral insurance, and
property insurance combined in a single microfinance "care" policy.
The benefit is easier administration and a lower cost for
clients.
HEALTH
By working with health management organizations, MicroEnsure can
provide full in and out patient coverage including access to
anti-retroviral drugs for individuals as well as families.
DIRECT TO PUBLIC
A
number of products are being designed to be sold directly to the
public using various points of sale. These products normally
require technology such as cell phones to reduce the transaction
costs to a sustainable level.