Luxembourg-based non-profit association, the Microinsurance Network (MiN) has published its annual research benchmarking the number of people who own microinsurance, alongside premiums collected and estimated market size.
The report, The Landscape of Microinsurance 2023, also examines distribution and payments, women’s access to insurance, climate risk, reinsurance and regulation and social performance indicators.
Based on a study conducted through interviews with 294 insurance providers, reporting on 1,040 products sold in 36 countries, the report says up to 330-million individuals were covered by the products in 2022. This, they say, represents only 11.5 per cent of the population that could benefit from microinsurance. (Microinsurance is defined as products with modest premium levels based on the risks insured, developed specifically to serve the needs of low-income populations.)
Market growth
The market’s estimated value was pegged around $41.4-billion in 2022 (all figures in U.S. dollars), but only $5.8-billion in premiums were collected. The market grew in 2022, however: “The total number of people covered decreased by 46 per cent in 2020 at the height of the COVID-19 pandemic, followed by a notable recovery in 2021 when 21 per cent more clients were reached than pre-pandemic levels. This positive momentum has continued, with 28 per cent further growth of people covered from 2021 to 2022. In terms of premiums collected, there was 12 per cent growth during the same period,” they write.
Reportedly, life and accident microinsurance were the most popular products, reaching 171-million people in the 36 countries included in the report’s analysis. Health microinsurance was the second largest category, covering 72-million people globally, followed by agriculture, aquaculture and livestock insurance products, purchased by 33.6-million people collectively.
The risk mitigation landscape, meanwhile, is also evolving. They add that the penetration of digital banking and increased adoption of mobile financial services should also result in uptake.
Building global resilience
“Over the coming years, inclusive insurance will become a critical element in building global resilience, especially in light of the accelerating climate challenge and the growing impacts these risks present to climate-vulnerable populations,” says Marc Bichler, ambassador and permanent representative of Luxembourg to the United Nations Office in Geneva. (The report was developed in partnership with the United Nations Development Programme’s Insurance and Risk Finance Facility.) “This is where the role of insurance supervisors, regulators and government will come into the fore – and where studies such as this will play a vital role in helping define and shape insurance products for the markets they serve.”
