Gates Foundation Partners with Labor Organization for Microinsurance

The Geneva-based International Labor Organization has announced a partnership with the Bill & Melinda Gates Foundation that aims to develop new kinds of insurance and improve existing products to promote decent work for tens of millions of low-income people in the developing world.

The Gates Foundation’s $34 million grant will help create the Microinsurance Innovation Facility, which the ILO described as a “one-of-a-kind, five-year initiative that will provide grants and technical assistance to dozens of organizations serving the poor. Over the course of the next three years, the facility will issue bi-annual requests for proposals and provide funding to pilot new insurance products, improve efficiency in the field, and use technology to create new products that better meet people’s needs. The facility will also train technical specialists to help replicate successful models.”

The effort is part of the foundation’s “Financial Services for the Poor initiative,” which works with partners to develop and employ innovative ways to bring a wide range of financial services, including microinsurance, to people living in poverty throughout the developing world. Microinsurance includes a range of products that can help workers manage economic hardship brought on by situations such as drought, hospitalization, or a death in the family.

Microinsurance is employed to “extend social protection coverage to excluded persons, such as workers in the informal economy or the rural poor, and contributes to more inclusive insurance markets,” said the bulletin. “Through the facility’s grantees, by 2012 at least 25 million people living in poverty will have access to insurance coverage that they otherwise would not have.”

The bulletin also indicated that “according to the MicroInsurance Center, a US-based consulting firm, there were an estimated 246 risk-taking providers of microinsurance covering over 78 million lives in the 100 poorest countries in 2006.”

Bob Christen, director of the foundation’s Financial Services for the Poor initiative, commented: “The Bill & Melinda Gates Foundation is proud to partner with the ILO in efforts to serve millions of people with great needs and few resources,” said. “We hope the Microinsurance Innovation Facility will catalyze dozens of new, innovative approaches to offering and delivering microinsurance services. Through the ILO, their grantees, and the Microinsurance Innovation Facility, we are committed to learning more about the impact and value of insurance for people in developing countries.”

Source: International Labor Organization – www.ilo.org