Impact insurance

The ILO’s engagement with the insurance industry goes back decades. Our focus is to push the frontier and to explore how insurance can contribute to the development agenda, with a particular focus on decent work. The ILO’s Impact Insurance Facility focuses on testing new approaches, documenting experiences, and then promoting good practices through capacity building and market development.
 

Testing new approaches

Over the years we have worked with over 100 insurers around the world to test new products and processes to enhance the coverage against a variety of risks. These include personal accident, death, small business protection, drought, floods, ill health and hospitalization. For example:

Agriculture and climate change. Insurance is an important tool for governments and development partners as they promote resilient agricultural practices, enhance food security and maintain business continuity. Efforts to support farmers against the vagaries of weather can also stabilize rural incomes and stem the flow of migration to urban areas. Read more about our work on vulnerable properties, agricultural risks and climate risks.

Health. Activities undertaken by Social Finance to manage health-related risks are intended to complement universal health coverage, which the ILO considers the responsibility of the public sector. Our efforts are primarily aimed two activities. First, the financial sector can help facilitate the enrolment of persons, particularly those working in the informal sector, into the national scheme. Second, national schemes will invariably have limitations in their benefit package, so we explore how insurers provide complementary benefits. 

Gender equality. Women and men have different exposure to risk, and different risk appetites. Insurance products that do not consider important gender differences are likely to be less effective in helping women, and men, to manage risks. We are particularly interested in seeing insurance products that are designed specifically to cater to the risk management needs of women, which are an under-served market segment in many countries. 

Decent work. Insurance can also be an important tool to help manage the risks of micro, small and medium enterprises. It is important to also recognize the productive role of insurance, either by unlocking access to other services, such as credit, or by giving entrepreneurs the peace of mind to take additional business risks.

Promoting good practices through capacity building and market development

When we work with insurers to test new products and processes, the purpose is not to benefit that insurer, but rather to generate insights that will benefit the sector more broadly, with the ultimate intention of contributing to social and economic development. To promote the lessons that have been generated, we have developed over 20 training modules to promote the lessons learned over the past decade. Besides conducting training to build the capacity of local insurers, we develop the market through gathering and disseminating market intelligence and facilitating partnerships. 

Read more about the Facility’s work on capacity building and market development.