In January, industry heavyweights from the property/casualty insurance underwriting and brokerage world announced a plan to improve risk protection for underserved markets in developing countries by setting up a microinsurance consortium and microinsurance venture incubator (MVI).
The consortium consists of:
- XL Catlin Group
- Aspen Insurance Holdings Limited
- Guy Carpenter & Company, LLC
- Hamilton Insurance Group, Ltd.
- American International Group, Inc.
- Marsh & McLennan Companies, Inc.
- Transatlantic Reinsurance Company
- Zurich Insurance Group
“In many regions of the world, opportunities to better oneself and one’s community come more slowly and with devastating risks because the resilience created by the insurance sector is not available. This must change,” said Mike McGavick, CEO of XL Catlin.
Joan Lamm-Tennant, global chief economist and risk strategist, Guy Carpenter, has been appointed to serve as the MVI’s CEO. “Our vision begins with the belief that insurance is highly relevant to the social progression of a country and a society,” Lamm-Tennant said in a video posted on Guy Carpenter’s website recently. “But we also understand that not any one of us has full knowledge on how to achieve this mission. So we are working together collaboratively not to sell a product but to open a market for microinsurance,” she said.
The MVI has committed to launching 10 microinsurance ventures over the next decade, with the first to launch in 2015. Focal points include Latin America, Africa and the emerging Asian market.
Explaining the concept of establishing local ventures in these areas, Lamm-Tennant spoke about providing “turnkey cost-efficient services” that will allow insurers to successfully enter the market with risk capital,” and about the prospect of establishing global strategic alliances for the ventures—potentially with financial institutions that are currently servicing the target customer group, or even with mobile phone entities.
“We’ll leverage these global alliances across all of the ventures in our plan,” she said during the video, stressing goals of making the ventures sustainable and profitable.
In the video, Lamm-Tennant defines microinsurance as “small-summed insurance that benefits low income populations.” She also notes that 2.6 billion of four billion men and women living in poverty are “vulnerable,” meaning that they have the potential of emerging into the middle class but could also easily fall back to the bottom of the economic pyramid without risk protection.
“These men and women have businesses and expertise. They are small-scale farmers, artisans and shop owners,” she said, noting that microinsurance policies are designed to provide protection for their specific risk needs “in a cost-efficient way and at a price point that’s appropriate.”
Lamm-Tennant provided more specifics to Carrier Management during a videotaped interview at the IICF Women in Insurance Global Conference in June.