Microinsurance as a tool to extend Social protection

Microinsurance as a tool to extend Social protection Development, diversity & key issues Valérie Schmitt Diabaté ILO / STEP, october 2007 1

Access to social protection coverage (notably in health) is a priority • Human right to social security & access to health • Poverty alleviation • Positive impact on performance and productivity • Fight against epidemics • Enhance efficient management of health • Reinforce social cohesion, promote democracy 2

Universal coverage is not a reality but strong international mobilization • The social protection coverage is still weak (only 5 to 10 % covered in sub Saharan Africa); increasing informalization of work • A consensus: – ILC 2001, Global campaign 2003 – Several international conferences and initiatives (see Elodie’s presentation) 3

In the developping and middle income countries, many initiatives to extend SP • A variety of mechanisms are possible – Social insurance – Universal systems offering free access to services without conditions on resources – Social assistance targeted to vulnerable populations – Private insurance – Health mutual organizations and microinsurance • Each mechanism has advantages and disadvantages, no single mechanism can provide an adequate response • They are complementary (should not be in opposition), tendency at the country level to capitalize on this – It is now accepted that microinsurance represents a necessary dimension 4

Microinsurance as a Social protection mechanism – Purpose & principles At an affordable cost, including for the poorest subsidies, redistribution Access to an existing service • Provide excluded people with access to an essential package of social protection 9 contingencies Efficiency Responding to the priority coverage needs 5

Development of microinsurance • Results of The Landscape of Microinsurance in the World's 100 Poorest Countries (2006) – 78 million lives covered by Microinsurance in the World's 100 Poorest Countries – Prediction: at least 10% growth in 2007 and 100% growth over five years • ILO / STEP Inventories – Results of the 2003/2004 inventory – Permanent inventory starting in 2007 • Africa : www. conceration. org • Coming soon on AMIN website 6

Development of microinsurance Results of inventory (2003 -04) 7

Development of microinsurance Results of inventory (2003 -04) Weak in % of the total population 8

Diversity of microinsurance • Benefit package (Life, health …) and within health (hospitalization, OPC, maternity, …) ; levels of benefits • Several organization models – Various responsible organizations (HC structure, community, cooperative, trade union, MFI, etc. ) – Community based schemes, mutual health organizations (in house management, no subsidies), stand alone or belonging to a network of schemes – Linked schemes: Outsourcing of management and agreements with HC providers (TPAs) or insurance function (P-A model), Subsidies, Etc. • ILO / STEP Inventories – Identification of types of schemes with common characteristics 9

Diversity of microinsurance Principal Component Analysis (PCA) Mali Benin, Burkina, Tchad, Togo, Cameroon, Ivory Coast • Small number of offered packages • Capitation • Annual contributions • RO: Health care provider Nepal The Philippines • Differences in contributions (linked to revenue) • No membership conditions India • Small number of beneficiaries • Organisations in starting-up or problematical phase Senegal • High number of offered packages • Non formal responsible organisation • Medium size (number of beneficiaries) • Target group: the poor • Membership: non voluntary • High number of beneficiaries 10

Key common issues • The trade off between financial protection and affordability of premium / necessity of additional source of fundings • The question of flat rate premiums / equity • The challenge of the extension towards universal coverage • The question of technical performance, management, monitoring … • The relationship with health care sector • Others? 11