La Positiva Seguros, Peru

Grantee

La Positiva, a general insurance company, founded 69 years ago, is one of the most prominent insurers in Peru with 2 millions clients and brokers covering most of the country. It is active in the provision of health, asset and accident insurance. La Positiva has a solid experience in and commitment to microinsurance - its first products were offered in 1988.

Consortium members:

• Junta Nacional de Usuarios de los Distritos de Riego del Perú: created in 1969, this national organization grouping 112 local associations disseminated in all provinces, manage - on a not-for-profit basis and under the supervision of the Ministry of Agriculture - the distribution of the irrigation water in Peru. With 1.6 million members, the Junta represents the farming communities and as such is a key actor in rural development.
• Brightstar Peru SRL, an IT company, created in 1997, specialises in wireless technology.

Project Summary

• Project name: Designing and marketing microinsurance products for farmers and their families through rural water associations
• Project start date: September 2008
• Duration: 3 years
• Country: Peru

Beneficiaries

In this project, La Positiva is targeting farmers, rural workers and their families. Through the water associations, it expects to serve 1.6 million households. Most of the association members do not use banks or MFIs, and therefore the collaboration with these grassroots organizations trusted by local communities enables the insurer to reach a market that it otherwise would not be able to serve.

Project Description

In partnership with the rural water associations, La Positiva plans to analyze farmers´ needs for risk coverage, sensitize distributors and consumers about the importance of insurance, and take advantage of the irrigation delivery system to distribute the products – premium payments will be bundled with water bills. Thanks to a technology component (partnership with Brightstar to support communication exchange and data management between the local associations and the insurer), the billing system will progressively become more automated, and should contribute to develop outreach, reduce premium costs and improve efficiency.

The originality of this project is to be found in the association between a commercial insurer and a grassroots organization that has a close access to the farmers, works on a daily basis with rural communities, knows their needs and advocates for farmers rights. The Facility is keen to support the innovative distribution system via the water associations as an alternative to the more common practise of linking microinsurance to another financial product.

The consortium has some interesting ideas in terms of market education. They plan to use visual material such as video, board games and posters in local languages (Aymara and Quechua) to ensure a better understanding and ownership of microinsurance. I the project succeeds, the new products could reach very significant numbers of low-income workers and the model could positively influence the industry.

Learning Agenda

• What are the main risks farmers face and how do they manage them? What are the socio economic characteristics of farmers, field workers, and their families?
• How can insurers overcome limited infrastructure in rural areas, including communications, health care, and funeral services?
• Are there any socio economic or behavioral changes once there is access to microinsurance? To what extent do farmers benefit from microinsurance to protect and build their assets?
• What are farmers, field workers and their families perception on microinsurance? To what extent and how can consumer education change the perception?
• Is the distribution channel efficient? Could it be replicated in other countries?
• What technology is best for sales and management of microinsurance in rural areas?

Quotes

More information on the project

• La Positiva Seguros
• Junta Nacional de Usuarios de los Distritos de Riego del Perú