Performance Indicators for Microinsurance Practitioners

Publication Date: Dec 2006
Published by: Appui au Développement Autonome (ADA)
Document Type: Conference Report (PDF)

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This report provides a summary of the Microinsurance Workshop held in Luxembourg on October 16-17, 2006.

This report was developed from the 'Performance Indicators for Microinsurance Practitioners’ workshop held in Luxembourg on October 16-17, 2006, which examined the steps needed to improve the credibility of microinsurance.

The workshop aimed to:

• Strengthen awareness of micro insurers for performance analysis and risk management;
• Provide practitioners with a first set of microinsurance performance indicators and test them using data from the workshop participants;
• Share information necessary to monitor performance and to increase transparency;
• Promote exchange of experiences between participating micro insurers and experts.

The workshop discussed:

• The seven dimensions of microinsurance analysis including organizational structure, marketing and distribution, viability, risk, investment and operations management, and client value and service.
• Measuring performance in microinsurance, including:
  • Key principles such as collection of data, production of financial statements, calculation of premiums and claims, efficient claims monitoring, clear investment policy, right technical expertise and transparency;
  • Key indicators such as ratios of net income, incurred expenses, incurred claims, renewal rate, etc.

The workshop concluded that:

• Microinsurance performance measurement (MPM) with a set of principles and indicators is important for managers to take well-informed decisions;
• MPM is important for the industry to achieve credibility and to attract future investors;
• Microinsurance is young and it is therefore crucial to learn and exchange information about existing models and practices.