Half a million more lives will benefit from microinsurance in India, thanks to an ambitious mutual microinsurance project from the International Cooperative and Mutual Insurance Federation (ICMIF) which aims to cover 25 million vulnerable lives by 2020.
The first country intervention from the so-called 5-5-5 Mutual Microinsurance Strategy was launched earlier this month in partnership with Uplift India Association in Mumbai, India. The country intervention will see Uplift expand its existing community-owned microinsurance programme to deliver affordable health insurance to more and previously unreached rural and urban low-income households.
About the 5-5-5 Project
Launched by ICMIF in 2015, the 5-5-5 Mutual Microinsurance Strategy aims to develop mutual microinsurance in five countries in emerging markets over five years, reaching 5 million low-income households (effectively 25 million lives), building greater resilience in vulnerable communities. Of the five countries selected to participate in the project (Colombia, Kenya, India, the Philippines, and Sri Lanka), India will be the first country in which an intervention has been launched.
The project in India is being directly supported by ICMIF member organizations from established markets around the world. Rob Wesseling, Executive VP, P&C Operations at The Co-operators (Canada) declared “The Co-operators is delighted to support the ICMIF5-5-5 Mutual Microinsurance Strategy in the form of both technical assistance and a starting grant for the country intervention project in India and it is our intention to create a long-term and formalized partnership with Uplift Mutuals.”
Sabbir Patel, CEO and Managing Director, ICMIF Foundation, explains the benefit of the mutual model for delivering insurance to low-income markets “Cooperative and mutual insurers are owned by, and operated solely in the interests of policyholders, and have for centuries demonstrated the success of a client-centred approach in serving previously underserved populations”.
Shaun Tarbuck, CEO of ICMIF reveals the role of the 5-5-5 Strategy in the insurance sector’s global response to the risks faced by poor communities which arise from disasters and climate change saying: “The 5-5-5 Mutual Microinsurance Strategy will be directly contributing towards the United Nations G7 InsuResilience Climate Risk Insurance Target of enabling an additional 100 million of the most vulnerable, low-income people in developing countries to access insurance. The InsuResilience initiative will involve partner countries, civil society, and local and international private insurance industries working together to help improve the resilience of poor people to disasters. By launching the 5-5-5 Strategy ICMIF and its members are demonstrating their commitment to sustainable development and improving the ability of vulnerable countries and people to be resilient in the face of disasters. Insurance can help to safeguard these communities against the shocks that would otherwise slow their ascent out of poverty.”
Dr Jaime Aristotle B Alip, Chair of ICMIF’s Development Committee, who was instrumental in the development of the 5-5-5 Strategy adds: “This is one of the most ambitious plans which ICMIF has ever launched, and it will have a positive impact on the lives of millions of low-income households.”
About the project in India
Kumar Shailabh, Executive Director, Uplift India Association revealed the planned impact of the project saying: “This intervention will see more than 200,000 microinsurance policies issued in the next five years providing coverage to half a million low-income people, and will reach out to an additional 1.4 million individuals between years five and ten of the project”.
Shailabh describes the target population of the project “They are mainly families with a daily income of USD 2-6, primarily employed in the informal sector with little or no access to social security schemes.” With over 80% of India’s population currently not covered under any health insurance scheme (according to the National Health Profile 2015, compiled by the Central Bureau of Health Intelligence), a single event of hospitalization leads to over a quarter of families slipping below the poverty line. Therefore, the need for an affordable health solution is clear.
Uplift Mutuals is the flagship programme of Uplift India Association, and was born out of the health protection needs of a self-help group of women in 2003. Uplift has developed an entirely community-owned health insurance model which meets the needs of members at an affordable price. Uplift’s ecosystem approach provides preventive and promotive healthcare services to members, and has delivered health insurance to over 200,000 urban and rural poor in Maharashtra and Rajasthan. ICMIF will work with Uplift Mutuals to expand their existing health network, reaching out to new communities and making them resilient to health disasters.
The broader issue
New research from the International Cooperative and Mutual Insurance Federation (ICMIF) highlights that 45% of the world’s countries do not have a local law that allows mutual or cooperative insurance.
A new infographic produced by ICMIF, Access to mutual and cooperative insurance, illustrates that the countries where there is no mutual/cooperative insurance law represents 9% of the world’s Gross Domestic Product (GDP). The aggregate population of people living in these countries represents 16% of the world’s total.
The research also suggests that it is people in low income countries around the world that have the least access to mutual/cooperative insurance, as 63% of low income countries (as classified by the World Bank, 2016) have no mutual/cooperative law. In comparison, only a third of countries classified as high income have a legal or regulatory environment that does not allow mutuals or cooperatives to write insurance.
In population terms, the disparity between those living in high and low income countries is even more pronounced: only 6% of people living in high income countries do not have access to mutual/cooperative insurance, compared to 64% in low income countries.