Some of the biggest companies in the re/insurance industry have come together and launched a new micro insurance consortium and micro insurance venture incubator (MVI) at the World Economic Forum (WEF) in Davos.
The consortium consists of AIG, Aspen Insurance Holdings Limited, Catlin Group, Guy Carpenter & Company, together with Marsh & McLennan Companies, Hamilton Insurance Group, Transatlantic Reinsurance Company, XL Group and Zurich Insurance Group.
The MVI has pledged to support launching 10 micro insurance ventures over the next decade in currently unserved or under served emerging markets.
These re/insurance companies taking part in the MVI are currently evaluating opportunities in Latin America, Africa and emerging Asia, with the initial venture set to be launched this year.
Joan Lamm-Tennant, global chief economist and risk strategist at Guy Carpenter, has been appointed to serve as the MVI’s chief executive (CEO) and will be based in New York.
Recent reports on last year’s catastrophe losses continue to highlight the vast gap between global insured losses and economic losses.
In 2014 for example, the US represented the costliest market for insured losses, despite high profile catastrophes in developing markets causing more damage and claiming more lives. This included typhoons in the Philippines and heavy rains and flooding in India and Pakistan.
Micro-insurance is one possible way in which to bridge this gap and provide insurance to the emerging markets.
“The ability to manage and finance risk is important to the development of a society. As an industry, we have a responsibility to be socially relevant,” said Alexander Moczarski, president and CEO of Guy Carpenter and chairman of Marsh & McLennan Companies International.
“The gap between economic and insured losses continues to be an impediment to the emergence of societies.
“The establishment of the MVI demonstrates our commitment to advance the relevance of insurance in society by addressing the risk needs of the under served.”