Inclusive insurance

Microinsurance Network calls for action in Luxembourg and Global North

Katharine Pulvermacher of the Microinsurance Network (MiN) is seen during a visit by international development minister Franz Fayot (LSAP) and finance minister Yuriko Backes (DP) to the Maison de la microfinance in Luxembourg, 2 May 2022. Photo credit: SIP

Katharine Pulvermacher of the Microinsurance Network (MiN) is seen during a visit by international development minister Franz Fayot (LSAP) and finance minister Yuriko Backes (DP) to the Maison de la microfinance in Luxembourg, 2 May 2022. Photo credit: SIP

This year, the Microinsurance Network (MiN) welcomed 13 new institutional members, including leading global re/insurers and regional insurance companies, as it prepares for a year of greater impact in 2023 and beyond. Katharine Pulvermacher underscored the reason behind the momentum and market opportunities in an interview with Paperjam+Delano Finance.

The network’s strategic vision for 2026 includes actions that will result in more readily available insight, data and country-level knowledge about implementing inclusive insurance programmes globally. In line with this long-term goal, the global multi-stakeholder platform for professionals and organisations, committed to the global growth of inclusive insurance markets, increased its institutional membership by more than 10% for the second year in a row.

Katharine Pulvermacher, executive director of the Microinsurance Network, said in an interview that the increased membership is being driven by greater awareness of a variety of factors, including climate change consequences, pandemic-driven awareness of health risks and income security concerns associated with an increased need for income protection and security, particularly in the informal sector, which accounts for a large portion of many developing economies.

She mentioned other factors, such as the increased emphasis on digitalisation and technological innovation, which she sees as an essential part of efficiently providing insurance services, but which remains uneven due to some late adopters in the global insurance ecosystem.

“There is [increasing] awareness of the difficulties that life is presenting. I think that in the business world, just as in the political world, there is a sense of urgency… [for] some systemic changes to address [these issues],” said Pulvermacher.

Beyond membership growth, this sense of urgency has prompted shifting dialogues even in the Global North, where inclusive insurance services are often regarded as less important, as people realise that “exclusion isn't just a problem in the Global South.”

Insurance industry’s missing middle

When it comes to inclusive insurance, some of the gaps that still exist and need to be addressed in many advanced economies can be found in what Pulvermacher refers to as the “missing middle,” or more specifically the SME segment.

“They represent 90% of businesses [and] are massive employers. They’re not huge corporations and brand names that we’ve always heard about, but they’re the backbone of nearly every economy,” she pointed out. Pulvermacher added that there’s an opportunity for insurers in the Global North, including in smaller countries, to build this business segment and to create insurance products that serve the needs of this missing middle, which she also says includes emerging consumers in the $3 to $20 per day bracket, who require tailored solutions that prevent them from falling back into the poverty trap in the context of any crisis or sudden shocks.

“Only a tiny fraction of emerging customers and small-scale producers around the world have insurance of any kind--even for smaller, more frequent risks that can have a devastating effect on their way of life and economic well-being,” the network shared in a statement.  

Dynamism in partnerships, learning lessons from others

Insurers that prioritise strategic partnerships remain relevant across the board. Pulvermacher provided examples of complex, unusual and well-planned collaborations between public and private players, as well as across sectors. For example, insurers collaborating with fire alarm companies to provide property insurance against fire, or insurers collaborating with ride-hailing apps in accident-prone countries. She gave examples from South Africa, where behavioural economics has influenced product development and innovation. Medical aid recipients, for example, stand to benefit from vitality programmes that provide gym membership subsidies, cash back for healthy food or other insurance offerings that reward with flight miles, membership upgrades, and so on.

These unusual and strategic types of solutions and partnerships represents best practices for the network. “What the micro insurance network brings to these players is an opportunity to learn from this accumulated body of knowledge that is constantly being refreshed… the vision, consistency, and the support from the Luxembourg government has been invaluable in this respect.”

The Luxembourg government--the Ministry of Finance and the Directorate for Development Cooperation and Humanitarian Affairs of the Ministry of Foreign and European Affairs--supports MiN. The network began as a CGAP working group in 2002, and 10 years later, it became an independent non-profit.

CGAP re-joined the MiN network this year as one of the 13 new institutional members. Dreamlopments Foundation, a finalist for the 2021 European Microfinance Award, is also among the list of new members. Pulvermacher explained that other contacts from the European Microfinance Award like Pakistani Kashf Foundation and Kenyan APA Insurance are also long-standing members.

“There should be a natural synergy between microfinance institutions and insurance. This is [an] area where I believe there is considerable room for improvement,” said Pulvermacher. Insurers will need to “start thinking carefully again about the core business of providing insurance and risk management services.”


Another interesting trend in membership growth is “the influx of insurance supervisors” which she describes as government bodies associating themselves with the network as they develop financial inclusion and socio-economic development strategies. “Being part of the group sends a very powerful signal to the private sector in their respective countries.” The World Bank, UN agencies and donors across Europe also make up part of the MiN network.

I love to see these synergies between the work that the different organisations are doing… Bringing people together from different sectors to exchange ideas [is] an added advantage.”
Katharine Pulvermacher

Katharine Pulvermacherexecutive director Microinsurance Network (MiN)

A chance for Luxembourg

For the public sector, and given the diversity of nationalities in Luxembourg, she says that the growth of memberships represents a sense of pride to the multiple nationalities in the grand duchy when they realise the reach of the Luxembourg government by means of direct programmes, though agencies like LuxDev, but also via other organisations that it supports. “It’s a way of raising Luxembourg’s profile,” which already has a reputation of being a centre of excellence for financial inclusion.

As a member of the Insurance Development Forum’s leadership committee, Pulvermacher underlined that current dialogues have stressed the importance of responsible financing, given that insurers are the world’s largest group of institutional investors.

In the future, “insurers as investors have a role to play in thinking about what they invest in and how they invest,” she said, calling on Luxembourg insurers, which she says have significant assets despite the market’s small size.

She added that Luxembourg’s financial community must recognise insurance and pensions as part and parcel of a holistic and complete financial offering that goes beyond banking and investment.

This article was published for the Paperjam+Delano Finance newsletter, the weekly source for financial news in Luxembourg. Subscribe using this link.