The insurance gap continues to widen among vulnerable groups that face a plethora of economic and systemic barriers to accessing coverage. Could microinsurance – a financial tool helping marginalized communities in developing countries – bridge this gap?
It’s a question that one Canadian insurance provider is seriously mulling on the back of a United Nations-backed funding initiative.
“Microinsurance is a solution for enhancing the financial resilience of people, especially women, in developing economies,” said Chad Park (pictured), vice president of sustainability & citizenship at Co-operators.
Co-operators recently committed $410,000 to the Insurance Innovation Challenge (IIC), which will help scale four microinsurance projects in India, Kenya, Malawi and Sri Lanka.
However, Co-operators’ involvement isn’t just about financial contributions. Park emphasized the desire to learn from these initiatives and explore potential applications of microinsurance with CAMIC, the Canadian Association of Mutual Insurance Companies.
“There are marginalized, vulnerable communities in Canada that face challenges accessing traditional insurance,” Park told Insurance Business.
“It’s partly because of what we’ve witnessed with ICMIF on the international scale that we’ve thought, what could we take from that? What are the needs we’re seeing in Canada where we could apply some of the same lessons? It might be through that organization (CAMIC) that we could evolve some offerings in a Canadian context.”
What’s the broader significance of insurers getting involved in such initiatives? Park pointed out that it’s not just about doing the right thing—it’s also good business.
“The industry needs to address challenges related to rising risks and affordability. Being involved in these initiatives helps us understand potential solutions and adapt to changing needs,” he said.
“The industry needs to address challenges related to rising risk, related to the affordability and availability of insurance. There’s no silver bullet to these challenges but being involved in programs like this helps us get a more robust sense of the solution or combination of solutions we need to consider.”
Co-operators’ commitment to learning and adaptation also extends beyond microinsurance. The Canadian co-operative is actively exploring opportunities to invest in resilience and adaptation initiatives.
Park highlighted its focus on private sector involvement in addressing challenges like climate change.
“We believe that, as insurers, we have a role to play in catalyzing private investment in resilience and adaptation infrastructure,” Park said.
“For both the inherent purpose of insurance and the more hard-nosed business reasons, it’s important for us to have our eye on these issues and to contribute and learn as we do.”
The International Cooperative and Mutual Insurance Federation Foundation (ICMIF) and the United Nations Development Programme (UNDP) Insurance & Risk Finance Facility selected the projects taking part in the innovation challenge.
The projects address some of the most significant challenges facing low and middle-income communities, including health, well-being, gender equality, and sustainability.
Each project will receive US$100,000 through the IIC and technical assistance from ICMIF members, which includes Co-operators.
“The cooperative model makes it possible to empower real change, and partnerships like this showcase the importance of cooperative collaboration on a global scale,” said Co-operators president and CEO Rob Wesseling, who also serves as the chair of ICMIF.
“Our longstanding partnership with the ICMIF paved the way for this collaboration,” said Park. “ICMIF has a track record of supporting microinsurance as a solution to address financial resilience in developing economies. It’s about contributing to the broader goals of health, well-being, gender equality, and sustainability.”
Looking forward, Co-operators is committed to supporting innovative insurance initiatives, both internationally and domestically. The co-operative is looking to support the IIC over three years.
“We’re prioritizing programs that align with our values and contribute to the broader goals of sustainability and resilience,” Park told Insurance Business.
Do you have anything to say about Co-operators’ efforts to drive microinsurance projects and support insurance innovation? Please share your comments below.
