WHO’S WHO IN MICROFINANCE: MicroEnsure

MicroEnsure was founded in 2005 as a wholly owned subsidiary of Opportunity International, a global non-profit microfinance network created in 1974. As of 2007 Opportunity International reported having 815,705 microinsurance policyholders.

In 2005, Opportunity International launched a weather-index crop insurance pilot project in Malawi. The high demand and rapid growth of its insurance operations convinced Opportunity International to establish the Micro Insurance Agency that same year. In 2008, the Micro Insurance Agency adopted the name MicroEnsure.

According to MicroEnsure: “The focus of our work has always been to utilize weather index to unlock rural credit for groups of farmers rather than using weather index to cover whole countries or regions.” By the end of 2007, MicroEnsure was providing a range of low-cost products including health, life, property and weather-index insurance to 3.3 million poor clients and family members in Ghana, Uganda, Malawi, Zambia, Zimbabwe, Mozambique, the Philippines, Mexico and Columbia. Since receiving a USD 24.2 million grant from the Bill and Melinda Gates Foundation in 2007, it plans to expand its operations to an additional 11 countries by 2012.

About MicroEnsure’s Products:
• Credit Life: This protects the lending institution against the inability of the borrower to repay the loan as a result of death or disability.
• Term Life/Funeral: This product provides a fixed payout upon the death of the client, spouse, or children during a fixed period. It can also be extended to cover disability or life threatening illnesses.
• Property: This covers for losses of property from fire, natural disasters, flood, wind, theft, etc.
• Weather-Index Crop: This type of insurance provides policies that pay a fixed amount in the event of a measurable occurrence of a natural disaster, e.g. an earthquake registering a certain magnitude or a drought that has lasted for a certain number of days.
• Package Policy: To facilitate administration and lower the cost for clients, this policy combines a number of products to meet a specific need.
• Health: This product aims to provide full in- and out-patient coverage for individuals and families.

MicroEnsure does not carry risk on its own balance sheet, but instead partners with a variety of entities to carry the insurance risk. For life and property insurance, MicroEnsure typically partners with locally incorporated insurance companies. For index-based weather insurance, it partners with international reinsurers such as Swiss Re and Paris Re. For health insurance products, MicroEnsure has formed “cell captive” structures that act as external reinsurers. Cell captive structures are formed when an insurer “divides its insurance license into largely self-contained cells, and then ‘rents’ these cells to companies who want to write insurance business.” The microfinance institution (MFI) provides the cell with capital, becoming a key shareholder and participating in its profitability.

According to MicroEnsure, its “front office partners include microfinance organizations, child sponsorship organizations, NGOs, retailers such as mobile phone companies and multilevel marketers… With average revenues of USD 0.23 per policy, MicroEnsure has no option but to partner with a range of companies in order to reach out to the poor.”

MicroEnsure is headquartered in Cheltenham, United Kingdom, and has five subsidiary offices. The first subsidiary office, MicroEnsure Uganda, opened in 2006 and offers credit life, personal accident, property, and funeral insurance. MicroEnsure Ghana opened in 2007 and offers credit life, funeral, and property insurance. MicroEnsure Philippines was also established in 2007 with a head office in Iloilo. It offers credit life, micro housing, health, and weather-index crop insurance. MicroEnsure India opened in 2008 and offers weather-index crop insurance and cashless in-patient healthcare insurance, where the insurer pays a third party administrator (TPA) to pay claims to hospitals. MicroEnsure established its Tanzania office in 2008, where it offers funeral, permanent disability, warehouse receipt, and packaged life and property insurance. It is also running a pilot weather-index crop insurance program.

Mr Richard Leftley has held the position of President and CEO since the founding of MicroEnsure. He joined Opportunity International’s Technical Services Division in 2002 as Insurance Product Development Manager and Vice President of Product Development. Prior to this he worked as a reinsurance broker for Benfield Grieg Ltd., where he was responsible for Kenya, Uganda, Tanzania, Mauritius and Zimbabwe. Mr Leftley received a bachelor’s degree (Honors) in geography from Edinburgh University, United Kingdom.

Mr Brad Williams, Chief Operating Officer of MicroEnsure, has served as Chief Operating Officer of Sovereign Insurance Group and Regional Vice President of Berkley Insurance. Prior to these positions, he spent 30 years with Continental Insurance, where he performed underwriting and management roles. Mr Williams has a bachelor’s degree in economics from North Dakota State University, a master’s degree from Dallas Theological Seminary, and an MBA from Mankato State University, USA.

By: Stefanie Rubin, Research Assistant

Additional Resources:

MicroEnsure: http://www.microensure.com/

Opportunity International: http://www.opportunity.org/

Microfinancerisk.org: “Controls for Insurance Products – Cell Captive Insurance,” http://www.microfinancerisk.org/pages/Content.asp?SectionID=140