Microinsurance Delivery Models
In general, there are four main methods for offering micro-insurance. The partner-agent model, the provider-driven model, the full-service model, and the community-based model. Each of these models has its own advantages and disadvantages. However, for this particular project, the partner agent model will be integrated with the community-based/mutual model to provide micro-insurance products to the caregivers. This is because of their correlated advantages.
Partner agent model:
A partnership is formed between the microinsurance scheme and an agent and in some cases a third-party healthcare provider. The microinsurance scheme is responsible for the delivery and marketing of products to the clients, while the agent retains all responsibility for design and development. In this model, micro-insurance schemes benefit from limited risk but are also disadvantaged in their limited control.
Microinsurance premium:
FIPA insurance scheme will establish a mechanism whose beneficiaries are (at least in part) people excluded from formal social protection schemes, particularly, people involved in informal activities and their families. Specifically, the scheme will target caregivers in VSL groups with a range of 15-30 members per group. Although the scheme targets VSL groups, the micro-insurance products will be tailored to benefit households of VSLA members. Each VSLA member will contribute towards an insurance policy.
The scheme differs from others created to provide legal social protection to formal economy workers. Membership is not compulsory (but can be automatic), and members pay at least in part small affordable premiums ranging between UGX 500 per week in order to cover their benefits depending on the nature of the microinsurance product signed up for. For the first year, VSLA members shall not contribute towards microinsurance amounts exceeding their projected annual savings. This can be calculated basing on the group’s share value.
Prepayment and resource-pooling:
The regular prepayment of contributions (before the insured risks occur) that are pooled together.
Risk-sharing:
The pooled contributions are used to pay financial compensation to those who are affected by predetermined risks, and those who are not exposed to these risks do not get their contributions back.
Guarantee of coverage:
Financial compensation for a number of risks, in line with a pre-defined benefits package