Performance indicators for Microinsurance: a handbook for Microinsurance practitioners

Performance indicators for Microinsurance: a handbook for Microinsurance practitioners

Indicators and principles for microinsurance

Microinsurance is regarded by some as a risk management mechanism that the poor can use to compensate for the lack of appropriate state-sponsored social protection programmes. Alternatively, it is viewed by others as an opportunity to provide financial services to the low-income market at a profit. Regardless of where the emphasis is placed, all microinsurance programmes should aim to become viable since donor or government subsidies are only temporary or not available. Without subsidies, all programmes are subject to the same economic and market forces as mainstream businesses, and this requires them to be managed professionally. Management goals, however, cannot be achieved without constant monitoring and transparent measurements of performance.

This guide follows two workshops held for microinsurance practitioners and experts from around the world with the aim of sharing experiences and initiating discussions about measuring microinsurance performance. A number of key principles and key indicators came out of the workshops. 

The guide concludes looking at an assessment of social performance. Key points include:

  • programmes should not only be evaluated on technical aspects (e.g. financial viability), but also on their capacity to reach social protection outcomes; the socio-economic impact of these schemes on members and non-members should be taken into consideration
  • regardless of the key indicators that will eventually emerge, assessment of social performance should also consider if the microinsurance programme stays true to its objectives, and that should be to provide protection to the poor or near poor 
  • as microinsurance is very challenging, especially for health and asset protection, practitioners should ensure that they always reach populations at lower income levels 
  • social performance may be called the second bottom line. Performance measurement should not only be focused on good management but also on the ability to help the poor to mitigate risk. To perform well in this aspect, the organisation must have a clear social objective in its mission statement and business plan.