Opportunity International's Micro Insurance Agency to Develop and Provide Life, Health and Crop Insurance for 21 Million Poor People
Wednesday, Feb. 6 2008
OAK BROOK, Ill., Feb 06, 2008 /PRNewswire-USNewswire via COMTEX/ -- Opportunity International, one of the world's largest microfinance organizations, today announced it has received a $24.2 million grant from the Bill & Melinda Gates Foundation. The funding will help Opportunity International's subsidiary, the Micro Insurance Agency, greatly expand its insurance products to the poor in Africa, Asia and Latin America and will enable the world's first stand-alone microinsurance agency to enter 11 new countries and provide life, health and crop insurance to 21 million poor people by 2012.
Microinsurance includes a range of products that can help the working poor manage economic hardship such as flooding, drought, hospitalization, or a death in the family. Workers in the developing world are more likely to experience hardship that can make it impossible to rise out of poverty, yet less than three percent of people in the world's 100 poorest countries have any type of insurance to protect them from financial shock.
"Opportunity International is a trusted partner and the Micro Insurance Agency has great leadership and experience in this nascent industry," said Priya Jaisinghani, program officer at the Bill & Melinda Gates Foundation. "They are committed to testing different insurance products, methodologies and delivery systems all over the world, while helping to protect the poor from the severe financial consequences they face in their daily lives. The foundation is optimistic about the potential for microinsurance, and we have a lot to learn about products and services that will truly provide value to people living in poverty. We hope this grant will have tremendous impact by combining learning with doing."
The funding is part of the foundation's Financial Services for the Poor initiative, which is working with partners to develop and employ innovative ways to bring a wide range of financial services, including microinsurance, to people living in poverty throughout the developing world.
"The Bill & Melinda Gates Foundation grant will enable us to rapidly scale up the agency so we can offer insurance to poor people who have never enjoyed the basic protections that insurance provides," said Richard Leftley, president of the Micro Insurance Agency. "We are grateful that the foundation has acknowledged our capability to design, test and develop affordable insurance products that will give the poor a measure of economic security that doesn't exist in the developing world today."
An estimated 2.5 billion poor people worldwide have no access to insurance, Leftley explained. Only 0.3 percent of the poor in Africa have any insurance, and in 23 of the poorest 100 countries in the world, there is no identified microinsurance activity. "In some African countries, there is much education to be done because there isn't even a word for insurance in the local languages," Leftley said.
Opportunity International began offering microinsurance in 2002 and established the Micro Insurance Agency in 2005. Currently, the organization has 675,000 life, credit or crop insurance policies covering 3.3 million poor people in 10 African and Asian countries. Among its early innovations, the microinsurance pioneer developed a viable life insurance product in Uganda that includes coverage for persons with HIV/AIDS. In Malawi, a crop insurance program protects farmers from severe drought that caused starvation in their villages only a few years ago.
Will Enable Growth and New Products Including Health Insurance
The Micro Insurance Agency has developed innovations and technology to create affordable insurance products for individuals and groups of the poor. A typical life insurance policy costs about $1.50 per month and pays a death benefit for the head of household, spouse or child. "This keeps the economic shock of losing a family member from sending a working family back into poverty," Leftley explained. The life insurance product is so popular that about 40,000 new clients are signing up per month in the Philippines and 12,000 per month in Ghana.
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