Resource
Part IV. Micro-insurance: a component of social protection
Summary (English)
The definition of social security as a human right implies that (1) States have some kind of obligation regarding the right to social security / social protection and (2) everybody is entitled to a minimum of social protection, without exception or discrimination.But in many developing countries where States are characterized by low financial and institutional capacity, social protection coverage is dramatically low. In such contexts micro-insurance schemes may raise supplementary resources (financial means, human resources, etc.) that benefit to the social protection sector as a whole and contribute to facilitate and improve the governance of the social protection sector. More specifically, health micro-insurance schemes contribute to improve access to health care and have several positive effects in terms of participation of civil society, empowerment of socio-occupational groups including women.
Moreover, micro-insurance as a mechanism of extension has several added values or comparative advantages as compared to classical social security schemes, including its capacity to reach excluded groups, lower transaction costs, benefits packages well-adapted to the target population's needs, and lower incidences of fraud and abuses. However, micro-insurance faces several limitations including poor sustainability, little or no redistribution, and poorly adapted legislative frameworks.
To overcome these limitations, three pathways are suggested: First, that the further development of micro-insurance be enhanced and accelerated (in terms of population covered, scope of the benefits package, technical and financial capacities of the schemes, etc.); Second, that linkages be developed with other actors and institutions (e.g., outsourcing of management functions) as well as other components of social protection and the health sector (contracting with health care providers at local level but also defining contractual frameworks at national level); Third, that micro-insurance be further integrated in coherent and equitable national systems of social protection.
Related info
Note
Part IV of the guide The role of micro-insurance as a tool to face risks in the context of social protection (draft May 2006).