Helping Communities Manage risks from the ground up.

While microinsurance acts as a buffer against risks faced by the poor, we need to be wary of the vulnerable conditions in which these schemes operate. The financial stability of these microinsurance schemes is at stake given the high risk clientele they cater to, and the limited funds at the disposal of the scheme. Moreover, unlike other consumer products, insurance has peculiar traits that prove challenging when marketing the scheme to the target population. While some risks may pose threats to the survival of a microinsurance scheme, others may hamper the operation of the scheme and limit its ability to meet the set objectives. It is therefore essential for microinsurance schemes to identify and implement appropriate and effective risk management strategies, and more broadly adopt an IRM approach. The presence of a risk management structure enhances the scheme’s credibility. Lowered risk leads to improved operations and increased sustainability, which allows microinsurers to be seen as low risk, and therefore a better investment for partners and clients. Reinsurers will also be more forthcoming in dealing with risk-managed insurance schemes. Donors, potential staff, supporters, and clients also benefit from incorporation of IRM as the improved financial standing works in their favour.