Business News Americas report here that a Swiss Re representative has declared that they will seek to replicate the Microinsurance Catastrophe Risk Organisation (MiCRO) to provide cover across several Caribbean and Latin American countries in the coming months.
MiCRO was launched earlier this year by founding partners Swiss Re, Guy Carpenter subsidiary GC Micro Risk SolutionsSM (GC Micro), Caribbean Risk Managers Limited (CaribRM), Mercy Corps, a global relief and development agency; and Fonkoze, Haiti’s leading microfinance institution. Its remit in Haiti was to provide protection to Fonkoze’s microfinance loan customers against a range of specific weather and natural catastrophes using parametric triggers and an innovative settlement process.
As we reported in June, MiCRO policies were triggered by heavy rain and floods in Haiti and made payouts to many of Fonkoze’s clients, thus proving its viability and the claims process.
Swiss Re representative Nikhil da Victoria Lobo told Business News Americas that the fund behind MiCRO can now be replicated across other countries as the platform and technology is already in place. He also mentioned investor interest which is essential as the MiCRO scheme is backed by a fund which was seeded by a UK government contribution of $1.6m and private investments of a further $1m to $2M.
“The idea is really to start growing this as new clients and businesses are brought into MiCRO,” said da Victoria Lobo. “I think we have come up with a model that is commercially viable, particularly as it gets more and more scale.”
It would be a very positive step for the microinsurance sector if this scheme could expand rapidly and show growth which attracts investors and other schemes to be established. So many microinsurance schemes remain in pilot phase for years on end and it’s important for the sector for them to be able to become commercially viable operations. The way MiCRO provide insurance to holders of micro-loans is effective as it prevents them defaulting on their loans should disaster strike, thus providing weather and catastrophe cover and ensuring they can recover and continue to make loan payments.