Strengthening Communities Through Cooperative Insurance: ICMIF Insights

1. ICMIFInternational Cooperative & Mutual Insurance Federationwww.icmif.org

3. Key points • About ICMIF • Linkage with Takaful concept • Avenues for collaboration • The development function of ICMIF • Importance of insurance to poverty alleviation • Providing microinsurance products • The need and possibilities in Muslim countries

4. About ICMIF • Established in 1922 • Not-for-profit voluntary trade association • Represents 127 members from 67 countries • Member driven • “Strengthen and promote the cooperative and mutual insurance sector”

5. Linkage with Takaful concept • Policyholders co-operate among themselves for their common good • Every policyholder pays his subscription to help those that need assistance • Losses are divided and liabilities spread according to the community pooling system • It does not derive advantage at the cost of others

11. Avenues for collaboration • Reinsurance • Information • Training • Establishing Takaful windows with members • Development

12. ICMIF development function • Objectives • Provide support to small members • Assist cooperative bodies to establish insurance operations • Increase access to insurance to excluded sectors of society

13. ICMIF development function • Methodology • ICMIF Fees • Technical expertise provided by members • Development projects led by members • Partnerships with national and international donor agencies

14. ICMIF development function • Progress • Established 25 people-orientated insurance organisations • Unique Insurance Company – Ghana • Financial support received for Latin America • Contract to write guidelines on microinsurance • Turkmenistan – State Insurance Organisation • Health Mutual scheme – Mali • Currently involved in 22 countries

15. “Insurance is being recognized as an important tool for poverty alleviation”

16. Insurance and Poverty Alleviation • The poor are the most vulnerable • The impact of losses are more severe • They have minimum means of recovery • Success of microfinance schemes show the poor can and want to save • Savings and credit are used unproductively • The poor need a safety net to escape poverty

17. Providing microinsuranceThe challenges • Coverage • Regulation • Moral hazard and Fraud • Adverse selection • Education and trust • Technical expertise • Affordability • Retention • Sustainability

18. Providing microinsuranceThe possibilities • The cooperative microinsurance model • History of organising the poor • Operate for the interest of members by members • Trust • Ownership and loyalty • Peer pressure • Surplus reinvested or redistributed

19. Providing microinsurance • The partner agent model • No-risk fee for microinsurance provider • Better coverage for policyholder • Access to new market • Pooling of risks between informal and formal sector

20. Providing microinsurance • The donor agent model • Access to expertise • Financial sustainability • Guiding hand

21. The need in Muslim countries • Social services inadequate or unavailable • Large sectors of poverty in many Muslim countries • Over half of world’s lowest developed countries have a majority Muslim population • Increasing inequality in Middle East and Gulf countries

22. “Takaful is the second most important social institution to counter poverty and deprivation”OmarFisher,1999

23. How can we provide microtakaful products? • Establish informal microtakaful schemes • Encouragement of pro-poor organisations • Education of government and donor agencies • Involvement of Takaful sector • Technical expertise • Financial assistance • Partner-agent model “Bear ye one another’s burden”

24. A Global reach for local strength Thank you for your attention