Research Handbook on International Insurance Law and Regulation
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Research Handbook on International Insurance Law and Regulation

Edited by Julian Burling and Kevin Lazarus

Given its economic importance, insurance is a field that has been underserved as an area of academic study. This detailed book provides much needed coverage of insurance law and regulation in its international context.
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Chapter 19: Microinsurance: The Value Proposition at the Base of the Pyramid

Arup Chatterjee


Arup Chatterjee 1. INTRODUCTION There is improved visibility of financial inclusion on the global agenda today. A keynote area is the significant commitment demonstrated by government and business leaders today for garnering efforts towards bringing the uninsured, the unbanked and the marginalized members of society into the mainstream economy through financial market development. Microinsurance is central to the promotion of inclusive financial systems. It is gaining in popularity and happens to be one of the most significant growth areas in the development of the insurance sector. Recent evidence from many developing countries has demonstrated that not only can the poor afford to make small periodic contributions towards insuring themselves against risks, but that the risks they face are eminently insurable. Microinsurance is seen as an important tool for expanding financial access by increasing the ability of the poor to deal with various risks, beyond the combined impact of microfinance programs, safety nets and existing, informal mutual support systems. In a sense, microinsurance is similar to providing basic services like sanitation, electricity, or water and therefore is seen as a mantra for poverty reduction and social harmony. There is indeed a significant demand for a range of insurance products like protection of assets, lives, health and retirement. Moreover, as today’s global poor become tomorrow’s mass market, microinsurance not only represents a mechanism for tackling poverty, it also offers a potentially new revenue stream, and should be an essential element of the long-term global growth strategy of insurance...

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