GENEVA (ILO News) – The Microinsurance Innovation Facility at the International Labour Organization, in collaboration with the Z Zurich Foundation, is offering grants of up to US$ 500,000 for microinsurance projects that use technology and other innovations to protect large numbers of low-income households in developing countries.
The Facility has earmarked grants totaling US$ 2.5 million aimed at providing affordable insurance with high benefits for many low-income households, who are vulnerable to numerous risks including sickness, loss of livestock and catastrophic climate events, among others.
Such microinsurance projects involving technology and other innovations could support sustainable development by mitigating risk factors to such low-income households, less than five percent of which benefit from any form of insurance, and remain highly susceptible to risks posed by a wide range of issues including sickness, loss of livestock and catastrophic climate events.
The Facility’s application guidelines suggest that insurance premiums should remain low and benefit as many policyholders as possible in order to maximize the development impact and achieve profitability. To this end, creating economies of scale and promoting efficiency to cut administrative costs are critical issues, the Facility said.
Craig Churchill, Team Leader of the Microinsurance Innovation Facility, urged “providers to reconsider how products are structured, marketed, delivered, accessed and documented. [Microinsurance] requires significant efficiencies through simple products, procedures and non-traditional delivery channels and perhaps through front and back office technologies.”
The Facility said that advances in technology such as hand-held devices to manage claims, mobile banking and innovative premium payment methods represented opportunities for achieving scale and efficiency in developing countries.
Brandon Mathews, Head of the Emerging Consumer Department at Zurich Financial Services, said microinsurance “is a profitable market, and we would love to invite as many people as possible to try to make this market as competitive as possible. Competition is going to be what is important to forming a real market at the bottom of the pyramid.”
Proposals must be submitted online no later than 25 January 2011. The Facility expects to issue three to five large grants of $100K to $500K as well as four or five small grants (less than $100K). Further information about current grantees and projects supported by the Microinsurance Innovation Facility can be found on the Facility’s website in addition to the guidelines for applying for the current round of grants. This round represents the final set of innovation grants, and no additional rounds have been planned at this time.
The Round 5 grants are made possible by the sponsorship of the Z Zurich Foundation, whose mission is to supply people with the necessary knowledge and resources to maintain their livelihoods in the face of a rapidly changing world and the risks associated with it. The Foundation strategically facilitates sustainable development through its dedication to long-term partnerships, which combine Zurich’s global experience and risk management capabilities with the local understanding and development expertise provided by non-profit organizations.
The ILO’s Microinsurance Innovation Facility was launched in 2008 with the support of the Bill and Melinda Gates Foundation. Since then, it has promoted over 40 projects through four rounds of innovation grants. Previous recipients of grants have included insurance companies, cooperatives, non-governmental organizations (NGOs) and other microinsurance providers.
For more information: www.ilo.org/microinsurance