Microinsurance Continues to Make Headlines

After the announcement of Leap Frog’s successful $44milion fundraising last week, mainstream media has turned it’s neck towards emerging trends in micro-insurance. Today, Reuters wrote a feature article discussing the growth of the industry and concerns being raised over the ethical considerations of profiting from BOP revenue.
“The idea of making a profit off the very poorest members of society is also controversial. Yet supporters say it is necessary if insurance companies are to back such policies.
“Companies can and should make profits of the low-income market. This is the only way we will get commecial insurers in the market,” said McCord, who adds that non-profit organisations working alone rarely have the technical expertise to calculate the risks and then design an effective insurance program.

“A commercial approach is what’s needed here, across the board. But what helps a lot is using institutions that people trust to deliver the product.”
Francis Purwanta, a spokesman for Munich Re’s local partner, Asuransi Wahana Tata.
Critics say that goverments should be the ones assisting these people to rebuild their homes, rather than private industries who seek a profit. As the article states, however, the poor person who needs to rebuild their flood after the rain takes any help they can get. Further, does excluding the BOP undermine the market and suggest that these individuals are underdeserving of services that we percieve as basic to our every day lives?