Index Insurance Market Profile: Haiti
Summary — This profile documents Haiti's index insurance market through the MiCRO program, which provides catastrophe insurance to micro-enterprises through microfinance institutions. The program paid out $8.9 million in 2012/13 to help thousands of women-owned businesses recover from natural disasters.
Key Findings
- The $8.9 million payout in 2012/13 helped thousands of women-owned micro-enterprises recover from natural disasters.
- Market participation remained stable with over 60,000 clients maintained from 2012-2014.
- Total insurance portfolio reached $7.97 million in sums insured.
- Program aims to reach 70,000 micro-enterprises by December 2016 with $20.5 million in projected contracts.
- GIIF provides up to 50% premium subsidies for three years to achieve market sustainability.
Full Description
Haiti faces significant natural disaster risks including earthquakes, hurricanes, and flash floods, making it one of the world's most disaster-prone countries. The MiCRO index insurance program was launched in 2011 to provide catastrophe coverage for micro-enterprises through microfinance institutions, particularly Fonkoze Financial Services.
The program covers floods, hurricanes, and earthquakes using natural catastrophe and weather index products. It achieved significant impact in 2012/13 with an $8.9 million payout that helped thousands of women-owned micro-enterprises repair damages, replace inventory, and reopen businesses. The insurance costs 5% of the value of insured inputs and uses TRMM satellite data for calculations.
Market development has shown steady participation with 67,365 clients in 2012, 63,969 in 2013, and 60,142 as of June 2014. The total insurance portfolio reached $7.97 million in sums insured. The program involves Alternative Insurance Company as the local insurer, with Swiss Re and MiCRO as international reinsurers.
With GIIF technical assistance and grant funds covering up to 50% of premiums for three years, the program aims to expand to additional MFI distributors and reach approximately 70,000 micro-enterprises by December 2016, with projected active insurance contracts valued at $20.5 million. The regulatory environment operates under a 1981 law giving the Ministry of Economy and Finance supervisory authority, with IBRD working on new insurance laws.
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Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized FUNDED BY COUNTRY PROFILES INDEX INSURANCE MARKET PROFILE Haiti G L O B A L I N D E X INSURANCE FACILITY | 1 COUNTRYPROFILES HAITI BACKGROUND Haiti is one of the most disaster-prone countries in the world with earthquakes, hurricanes and flash floods. DEVELOPMENT IMPACT Micro-loans and Payouts: The $8.9 million payout in 2012/13 helped thousands of women-owned micro enterprises repair damages, replace inventory and reopen businesses. Products Available: Nat cat and weather index Perils Insured: Floods, hurricanes, earthquakes Intermediary Brokers MiCRO Launch Date 2011 Market Development MiCRO 2012: 67,365 2013: 63,969 As of June 2014: 60,142 Local Insurers Alternative Insurance Co. (AIC) International Reinsurers Swiss Re, MiCRO Calculation Agent Regulatory Environment A 1981 law gives the Ministry of Economy and Finance (MEF) authority to supervise the insurance sector. IBRD has been working with the MEF on drafting new insurance laws to put in place a prudential regime for insurance business, Product Design: While previously MiCRO/Fonkoze issued payouts to clients, under the current programs, micro-enterprises are no longer eligible for direct payouts; however, should an event trigger payout under the policy Fonkoze uses the funding from MiCRO to recapitalize borrowers that may have been adversely affected by a catastrophic event. The MiCRO pilot is still being tested. The key to success will be improving the rain, wind, seismic and parameters that guide the micro-insurance payouts. Data: TRMM Satellite Cost of Insurance: 5% of value of insured inputs Value Chain: Fonkoze Financial Services (MFI) Total Insurance Portfolio (sums insured) $7.97 million Payouts: $8.9 million (2012/13) Potential Market for Index Insurance- Cotton: MiCRO works through MFI Fonkoze, and hopes to reach economies of scale through other MFI distributors. Through GIIF technical assistance, the project will expand the reach of the product offer to more low-income microfinance clients by adding at least one additional MFI to MiCRO’s distribution channels by the end of the project. With GIIF grant funds, MiCRO is able to cover the costs of up to 50 percent of the premiums for three years, allowing MiCRO time to bring its index product up to a sustainable market level. Approximately 70,000 micro-enterprises are expected to be insured by the end of December 2016. The total projected value of active insurance contracts is estimated to be $20.5 million by 2016. 2 |