|November 21, 2018
IAA Microinsurance Working Group Releases a Paper on Assessing Risk and Proportionate Actuarial Services in Inclusive Insurance Markets
The International Actuarial Association’s (IAA) Microinsurance Working Group is pleased to announce the publication of the paper on Assessing Risk and Proportionate Actuarial Services in Inclusive Insurance Markets — An Educational Paper and Toolkit.
Around the world, people from a low-income background are vulnerable to a variety of risks due to their working and personal conditions. They often face the risk of falling into hardship due to the lack of social safety nets. If structured appropriately, insurance can play an important role in helping low-income people manage such risks. This is the context of inclusive insurance, which encompasses microinsurance. The goal of inclusive insurance is to provide financial protection against risks in a way that is affordable, sustainable, responsible and accessible by all types of customers, particularly customers from a low-income background.
This educational paper and toolkit fulfil the recommendation in the IAA Issues Paper “Addressing the Gap in Actuarial Services in Inclusive Insurance Markets”,
by addressing three key questions regarding the application of proportionate actuarial services in inclusive insurance:
● How does one identify the key insurance risks in terms of a product or a provider?
● What actuarial or other advice or services are needed to manage these risks?
● What level of actuarial skills, if any, is needed to deliver the actuarial advice or service?
This paper is an outcome of a joint project between the IAA and the International Association of Insurance Supervisors (IAIS) to develop frameworks to support the proportionate prudential regulation and application of proportionate actuarial services in inclusive insurance markets. This paper should be read in conjunction with the expected IAIS material.
Nigel Bowman, chair of the Microinsurance Working Group said “I am very excited with the publication of this paper, which provides stakeholders with a simple, yet practical framework for identifying and managing key risks in inclusive insurance products. It can play a strong role in improving the sustainability of inclusive insurance and highlighting the role that the actuarial profession can play where appropriate.”
Masaaki Yoshimura, IAA President said “The IAA is excited to publish this work piece, not only because we expect it to enhance risk management in inclusive insurance, but also because it begins to address the actuarial skills gap in inclusive insurance markets. I am hopeful this is only the start of greater involvement by the actuarial profession in the important area of inclusive insurance, where such involvement is warranted.”
The paper and toolkit are available on the IAA website under PUBLICATIONS/PAPERS.
This activity supports the IAA's mission to promote the role, reputation and recognition of the actuarial profession contributing to the well-being of society. Further, it contributes towards achieving the IAA's strategic objectives to provide relevant supranational organizations with actuarial input on matters of importance; to facilitate the coordination, use and expansion of the scientific knowledge and skills of the actuarial profession; and, to help enhance the scope, availability, and quality of actuarial services offered by individual members of its member associations.
To learn more about the work of the IAA on this topic, contact the Director of Technical Activities at the IAA Secretariat.