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Ten years of impact insurance

Emerging Insight #:


Date of Release:

  September 4, 2018


  Composite products, Value-added services, Agriculture


  The Facility

Reflecting on the key trends of the last decade

The ILO’s Impact Insurance Facility is celebrating its ten-year anniversary. Despite a drastically changed environment, many products, technologies and players that took their first steps with us a decade ago are now well-established, while other promising initiatives are just beginning.

Ten years ago, the Facility began with a focus on insurance for low-income households (a.k.a. microinsurance), but rapidly realized that the need for insurance went beyond the micro segment. While the traditional insurance industry was focused on corporates and high-net worth customers, there was a vast part of the population that was not micro but had no access to formal insurance. This segment of emerging customers is growing. One billion people will enter the consuming class (earning more than $10 a day) by 2025, and, for the first time in history, they will outnumber those struggling to meet their basic needs.

At the same time, the world has become a riskier place during the last decade. The Global Risk 2017 report ranked extreme weather events and natural disasters as top risks in terms of both likelihood and impact. Individuals affected by such risks resort to a variety of desperate coping strategies that include reducing food consumption, taking children out of school, borrowing money and selling assets. These strategies diminish people’s ability to cope with the impacts of climate change, both in the present and in the future. Climate change is just one risk that is fast changing our world; migration, changes in the nature of work, youth unemployment and economic instability have also led to greater uncertainty.

To face such complex risks, insurance is increasingly seen not as a standalone solution, but as a component of a more holistic approach to risk management. Insurers are engaging with stakeholders in agriculture, health, the environment and financial services to provide integrated solutions that promote the resilience of entire value chains and populations. Such holistic offerings are more tangible, result in better social outcomes, and enable schemes to scale more quickly.

Read all of the ten trends we have seen over the last decade in our brief: Ten years of impact insurance.