A new study on The Landscape of Microinsurance in Latin America and the Caribbean 2017 – Preliminary briefing note, finds that as at December 2016, 8.2% of the population in LAC had at least one microinsurance policy in place. This translates to 52.1 million people being insured, and corresponds to US$420 million in gross written premiums, estimates the study.

Vice Chairman of the Munich Re Foundation, Dirk Reinhard, said; “The LAC region has shown substantial growth in microinsurance outreach. However, recent events such as the floods in Peru, as well as the earthquakes and hurricanes across the region, have demonstrated that there is still not enough protection for people in the low-income market.

“Increasing governmental support and implementation of mobile technologies are important steps to develop the market, facilitating fast pay-outs when disaster strikes.”

The initial findings of the study were released as the 13th International Microinsurance Conference (IMC) opens in Lima, Peru, which brings together more than 400 industry experts from around the world.

Chair of the 13th IMC and Executive President of the Peruvian Association of Insurance Companies (APESEG), Eduardo Moron Pastor, said; “Governments across the region are recognising the important role that microinsurance can and does fulfil in helping people to cope with catastrophic and daily risks. Many governments have started improving their regulatory frameworks for microinsurance, with studies on the needs and potential demand for microinsurance underway in several countries.”

The study reveals some impressive microinsurance sector growth in certain regions across the LAC, with premiums increasing between 2013 and 2016 by almost 1,800% in Brazil, 284% in Nicaragua, and by 95% in Peru. Furthermore, regulators in Mexico reported that between 2007 and 2017, microinsurance premiums in the country have increased by an average of 36% per year.

At the same time, the study finds that commissions have been on the decline since 2014, with the average commission declining from 20% to 12%, while loss ratios have stayed fairly low, at an average of 46%.

Growth in the agricultural sector is also evident, according to the study, with the number of customers growing to 80,000 in 2016 from 35,000 in 2014, based on comparable data.

Katharine Pulvermacher, Executive Director of the Microinsurance Network, underlined the need for the continued development of effective and affordable risk mitigation and risk transfer strategies in vulnerable parts of the world.

“The recent disasters that have struck the LAC region serve as a reminder of the need to leverage insurance that is both effective and inclusive, and to develop risk mitigation strategies to help people – particularly the poor – become more resilient and less vulnerable. Our intent is to help develop their capacity to recover and rebuild, and avoid falling back into the spiral of poverty,” said Pulvermacher.

For more on this story go to; https://www.reinsurancene.ws/munich-re-underlines-microinsurance-growth-latin-america-caribbean/