It is our firm conviction that this bottom half of the global economic pyramid is an under-served client group that is far too big to be ignored. Having been active in microinsurance for several years, we have come to believe in its commercial viability. It may not be easy, but it can be done - provided sufficient scale is attained, and cover and claims are managed efficiently.
Our main success has been in India, where local insurers cover government-sponsored hospital care programs for millions of families living below the poverty line. A key issue here is fraud control, both at enrolment and during treatment in hospital.
We offer both risk sharing, through a reinsurance contract, and risk management of the underlying scheme. In this way we not only ensure profitability for the insurers and ourselves, but also help reduce the misuse of government money and hence ensure these programs actually benefit the poor.
This is a perfect example of how we share the knowledge we have with our clients. The early-mover advantage our clients now enjoy reflects Hannover Re’s openness to new ideas and our exceptional flexibility in exploring uncharted territory.