Microinsurance market in Asia, Oceania showed 40% annual growth between 2010 and 2012

The microinsurance sector in Asia and the Oceania region has shown a 40% annual growth rate between 2010 and 2012, according to new research from the Munich Re Foundation and Germany’s GIZ.

That translates to 172 million lives and properties covered, according to the research.

The growth was led by India, with more than 100 million, while Malaysia and Indonesia experienced growth rates of 185% and 100% respectively over the same time period.

Still, the microinsurance sector covers under 5% of the people living in Asia and Oceania, according to the Munich Re Foundation.

“When low-income people are unable to manage risk, they cannot break out of the cycle of poverty,” Craig Churchill, chair of the Microinsurance Network and head of ILO’s Microinsurance Innovation Facility commented in a statement on the research.

For this reason, “access to effective insurance by low income people is essential to sustainable development,” he said.

Life insurance is currently the main risk for which people are covered (83 million), followed by accident (77 million), health (27 million), agriculture (26 million), and property (7 million) insurance, the research suggests.

More than 1.6 billion are also estimated to be covered by subsidized schemes referred to as “social microinsurance” or social protection schemes, it notes.

“Market-based microinsurance needs to be complemented by schemes with governmental involvement to increase outreach, especially in the field of agriculture and health,” Dirk Reinhard, vice chairman of the Munich Re Foundation, commented in a statement.

“It is important that approaches based on insurance principles are being developed jointly, involving the insurance industry, regulators and client representatives, as well as donors.”