New legislation for microinsurance in West Africa
A new piece of legislation regarding microinsurance is being introduced within the 14 French-speaking members of the Inter-African Conference on Insurance Markets (CIMA) in west Africa.A new piece of legislation regarding microinsurance is being introduced within the 14 French-speaking members of the Inter-African Conference on Insurance Markets (CIMA) in west Africa.
It includes performance indicators designed by the NGO ADA and the BRS foundation, in partnership with the Microinsurance network and the German Agency for International Cooperation, states an ADA press release.
The objective is to introduce a better supervision system of the microinsurance sector in this region, so that low-income populations get better protection against general day-to-day risks.
The new legislation asks all microinsurers to account for nine performance indicators in microinsurance, including the net revenue ratio, the loyalty ratio or the cover rate.
This series of indicators should ensure a financially viable product offering, catering for the needs of low-income populations.
Microinsurance is considered as an essential link in the micro-economic system as it can efficiently support the development of micro, small and medium-sized companies.
The potential for development is important: according to a study carried out in 2009 by the microinsurance innovation fund of the International Labour Organisation, 14.7 million Africans living with less than $2 (€1.5) a day are actually covered by microinsurance products, which represents 2.6 percent of the African population entering the revenue bracket, APA news agency reports.