Households in poverty face significant risks to livelihoods and health from shock events such as hospitalizations, deaths of relatives, accidents, extreme weather, and natural disasters. Insurance coverage can help mitigate these risks, but only 6-14% of low- and middle-income populations in emerging markets are covered by insurance, with Africa as the least covered region at 4-9%.[i]
GP funds aim to enhance the economic resilience of households living in poverty by investing in social enterprises that provide affordable microinsurance products covering key shock events affecting households in poverty, with timely and approachable claims processes.
Who is Served:
Previously un- or under-insured individuals living below $5.50 PPP/person/day
What is Delivered:
Clients must receive:
- Affordable, simple microinsurance product(s) tailored to provide meaningful coverage of high probability and/or catastrophic shocks to target clients’ health or livelihoods;
- Information and engagement to facilitate client awareness, trust, understanding, and usage of the product; and
- Timely, fair, and user-friendly claims administration and customer service
Why it is Impactful:
- Household economic resilience improves due to enhanced ability to weather shocks and reduced reliance on stressful coping mechanisms.
- This enhanced ability to weather shocks may also result in: reduced over-indebtedness, increased asset/savings retention and accumulation, smoothing of food consumption and enhanced nutrition, reduced school absenteeism among children, and/or reduced stress.
- For agricultural insurance products, household food security and ability to cope with the effects of climate change also improve as farmers use microinsurance to mitigate crop/livestock shocks.
- For health insurance products, household health may also improve as families are better able to seek and receive timely and appropriate treatment.
[i]“The Landscape of Microinsurance 2021” Microinsurance Network, 2021, https://microinsurancenetwork.org/resources/the-landscape-of-microinsurance-2021; Low- & middle-income populations defined as individuals earning between $2-20 PPP/person/day.