Clarification Note

Discussion Notes are focused on research MILK will be doing and what we hope to learn through this future research.

MILK Briefs are about research that has been completed and indicate lessons learned from that work.

Condensed MILKs are short one-page summaries of MILK Briefs.

MILK Brief #15: "Doing the Math" - Catastrophe Insurance in HaitiMILK Brief #15: "Doing the Math" - Catastrophe Insurance in Haiti

Document Information
Name:MILK Brief #15: "Doing the Math" - Catastrophe Insurance in Haiti

Each hurricane season in Haiti threatens to erase the fragile progress made since the 2010 earthquake, and small business owners are among the most vulnerable. MILK partnered with the microfinance institution Fonkoze to explore the value of its Kore W catastrophe insurance in helping clients cope with the consequences of a flood. The product, which is mandatory for Fonkoze borrowers, covers any outstanding loan balance, provides a cash payout of USD125, and pre-approves clients for a new loan. We interviewed insured (some of whose claims were rejected and some approved) and uninsured small business owners in the wake of a 2011 flood to understand the costs they incurred and how they coped. We find that while the insurance payout covered only a small portion of the total losses, in combination with continued access to credit it was instrumental in helping clients to begin the recovery process. Long delays in claims payment (which Fonkoze has since begun to improve but remain long due to the product's design) led clients to undergo difficult financing strategies while waiting for the insurance benefit.  Nonetheless, the Kore W product helped many clients to avoid selling assets as many of the uninsured were forced to do. 

Filename:MILK Brief #15 - Catastrophe Insurance in Haiti.pdf
Published: 01/11/2013
Author:Barbara Magnoni and Laura Budzyna, fieldwork by Jonathan Bauchet