Advancing microinsurance through training in Egypt
The challenge: Low microinsurance penetration. Egypt is a country with great market potential for microinsurance with over 75% of the population classified as poor and low-income, many of whom lack effective coping strategies to confront the risks they face. Despite this perceived need, only 0.3% of Egyptians were covered by microinsurance in 2014, with outreach estimated to have increased to around 0.5% in 2017, according to research conducted by the MicroInsurance Centre at Milliman.
The MicroInsurance Centre at Milliman’s work
Extensive training and capacity building. In recent months, the MicroInsurance Centre at Milliman (MIC) has been working closely with the Japan International Cooperation Agency (JICA) to enhance the capacity of training institutions in Egypt with the goal of further developing the microinsurance sector. Beginning with a needs assessment in the first quarter of 2017, we collaborated with the Egyptian Financial Services Institute (FSI) and the Insurance Institute of Egypt (IIE) to identify relevant microinsurance courses to offer, covering topics such as product development, pricing, microinsurance intermediaries, and understanding low-income clients. While continuing to develop curricula, our team is simultaneously rolling out the microinsurance courses to a high turnout from Egyptian insurance companies and intermediaries. All courses during this roll-out period include a training of trainers (ToT) to ensure knowledge sharing and building of local capacity, a core philosophy of MIC.
Collaborating to build an enabling environment for microinsurance. The current training activities comprise Phase II of a cooperation between JICA, the Egyptian Financial Supervisory Authority (EFSA), and the MIC. In 2016, Phase I laid the foundation for advancing the microinsurance sector through assessing the sector and developing a roadmap for microinsurance in Egypt. Key Phase I achievements included EFSA issuing its first microinsurance directive, which establishes a regulatory definition of “microinsurance” and allows for expanded distribution. Additionally, there was an overall increase in collaboration among microinsurance donors and industry players exemplified by the creation of a multi-stakeholder Egyptian microinsurance platform.
Supporting industry dialogue. Microinsurance currently has a lot of momentum in Egypt. Other key stakeholders such as the German development agency GIZ have been actively promoting advancement of the sector by organizing conferences such as the recent “Microinsurance: International Experiences and Egyptian Applications” which took place in May 2017. The MIC supported the event with content development and facilitation, and we were encouraged by the enthusiasm for microinsurance that was demonstrated by the more than 200 industry practitioners who attended.