Sompo Japan has been trialing a weather risk microinsurance product in a region of Thailand since January this year (our article on the launch here). The trial project saw weather index insurance for drought sold in Khon Kaen province in Northeast Thailand. It was the first such microinsurance product made available in Thailand.
Sompo Japan say they now have 1,158 subscriptions to the scheme in the first four months of the pilot. Key to getting such good take up for the microinsurance product has been making it easy to understand and promoting the easy payout associated with an index based weather insurance product. Contractually predetermined payouts are made should the measured precipitation fall below a set level. Sompo
Sompo Japan says that they will work towards broadening this products scope to include other provinces, crops and countries in Southeast Asia.
The key element here is simplicity. Insurance products can be complicated and it is essential for the success of microinsurance to make it understandable and predictable for the people targeted as potential customers. In this case Sompo seem to have got that right.