New from the ILO Microinsurance Innovation Facility: Innovating to create client value

Moving beyond credit life insurance

A vast majority of microinsurance programs at microfinance finance institutions (MFIs) start with offering some sort of credit life coverage, which is the most common product offered to low-income households. It is a logical starting point as it is easy for MFIs and insurers to introduce. However, credit life insurance still doesn't bring, from the client’s perspective, enough value, so there is much room for improvement. One way to increase credit life value for low-income people is to expand coverage to include additional risks. A new report, “Moving Beyond Credit Life Insurance,” by the ILO Microinsurance Innovation Facility discusses credit life insurance and some ways to enhance client value.

Innovative "hospital cash"

Another example of enhancing client value can be found in a hospital cash microinsurance product that is being implemented in Jordan.  In an interview with Fadi Al-Tawabini, a Microinsurance Officer at Microfund for Women Jordan, Al-Tawabini explains that the hospital cash product is very simple and compensates clients for loss of work due to hospital stays. Al-Tawabini says that the product was changed over time to provide more value to the clients. First, coverage was maximized, then  the provider changed from an international insurer to a local insurer, and finally claims began to be approved for up to six nights at the hospital. The organization’s main challenge has been with fraud. Even though the rejection ratio has never exceeded two percent, there is a concern that if a fraud claim is processed, then numerous fraud claims will start to pour in.

• Insurance
• Finance
• Risk Management
• Financial service providers
• Financial Inclusion