International Cooperative & Mutual Insurance Federation

         ICMIF

International Cooperative &

Mutual Insurance Federation

       www.icmif.org

              Key points

• About ICMIF

• Linkage with Takaful concept

• Avenues for collaboration

• The development function of ICMIF

• Importance of insurance to poverty alleviation

• Providing microinsurance products

• The need and possibilities in Muslim

 countries

            About ICMIF

• Established in 1922

• Not-for-profit voluntary trade association

• Represents 127 members from 67 countries

• Member driven

• “Strengthen and promote the cooperative and

 mutual insurance sector”

Linkage with Takaful concept

• Policyholders co-operate among themselves

  for their common good

• Every policyholder pays his subscription to

  help those that need assistance

• Losses are divided and liabilities spread

  according to the community pooling system

• It does not derive advantage at the cost of

  others

 Avenues for collaboration

• Reinsurance

• Information

• Training

• Establishing Takaful windows with members

• Development

 ICMIF development function

• Objectives

    Provide support to small members

    Assist cooperative bodies to establish

     insurance operations

    Increase access to insurance to excluded

     sectors of society

 ICMIF development function

• Methodology

   ICMIF Fees

   Technical expertise provided by members

   Development projects led by members

   Partnerships with national and international

     donor agencies

 ICMIF development function

• Progress

    Established 25 people-orientated insurance

     organisations

    Unique Insurance Company – Ghana

    Financial support received for Latin America

    Contract to write guidelines on microinsurance

    Turkmenistan – State Insurance Organisation

    Health Mutual scheme – Mali

    Currently involved in 22 countries

“Insurance is being

recognized as an

important tool for

poverty alleviation”

Insurance and Poverty Alleviation

• The poor are the most vulnerable

• The impact of losses are more severe

• They have minimum means of recovery

• Success of microfinance schemes show the

  poor can and want to save

• Savings and credit are used unproductively

• The poor need a safety net to escape poverty

      Providing microinsurance

               The challenges

• Coverage

• Regulation

• Moral hazard and Fraud

• Adverse selection

• Education and trust

• Technical expertise

• Affordability

• Retention

• Sustainability

     Providing microinsurance

            The possibilities

• The cooperative microinsurance model

    History of organising the poor

    Operate for the interest of members by

     members

    Trust

    Ownership and loyalty

    Peer pressure

    Surplus reinvested or redistributed

     Providing microinsurance

• The partner agent model

    No-risk fee for microinsurance provider

    Better coverage for policyholder

    Access to new market

    Pooling of risks between informal and formal

     sector

     Providing microinsurance

• The donor agent model

    Access to expertise

    Financial sustainability

    Guiding hand

 The need in Muslim countries

• Social services inadequate or unavailable

• Large sectors of poverty in many Muslim

 countries

• Over half of world’s lowest developed countries

 have a majority Muslim population

• Increasing inequality in Middle East and Gulf

 countries

“Takaful is the second

most important social

institution to counter

     poverty and

     deprivation”

             Omar Fisher,1999

 How can we provide microtakaful

                 products?

• Establish informal microtakaful schemes

• Encouragement of pro-poor organisations

• Education of government and donor agencies

• Involvement of Takaful sector

    Technical expertise

    Financial assistance

    Partner-agent model

         “Bear ye one another’s burden”

A Global reach for

 local strength

  Thank you for your attention