Insurance Programs

Policy Instruments


Insurance programs for the BOP empower them to participate in markets by protecting them against risks, such as illness, injury, damage, or loss. The BOP are often more vulnerable to such risks because they are less able to cope with the financial burden caused by unexpected occurrences. Despite this, the BOP are typically ignored by mainstream commercial insurers.

Governments can share the risk of covering BOP communities by:  providing fully or partially subsidized coverage for specific services; or paying customers’ premiums and entrusting private sector insurers with the operation of the scheme.

Case Example

Mexico:  Extending insurance to rural smallholder producers

With an agricultural sector which accounts for 3.8% of the GDP (2011) and employs 13.7% of the population, climate hazards are closely monitored by the Mexican government. Farmers are highly vulnerable droughts and cyclones. Credit in the rural agricultural sector is also scarce, but one way to access it is through banks which accept insurance as a guarantee for a loan. Therefore, access to insurance is even more crucial to these farmers.

As a result, the state set up Agroasemex, a public institution which offers rural insurance and reinsurance products. It is both a national insurance organization and development agency that provides reinsurance for Mexican insurance institutions, mutual societies, and insurance funds. Agroasemex provides stop-loss insurance of up to 100 percent of the total sum insured to mutuals of smallholder farmers. As a result, farmers don’t pay for insurance, Agroasemex rather collects the premium from federal and state governments.

The reinsurance subsidy provided by Agroasemex has remained important since it was introduced. As of 2009, Agroasemex’s Catastrophic Agricultural Insurance covered an estimated 3 million hectares in 18 states.


Policy Case Study

Further Examples

Additional Resources

  • Aggarwal, A. (2010). Impact Evaluation of India’s ‘Yeshasvini’ Community-based Health Insurance Programme. In Health Economics. Volume 19, Issue Supplement 1:  pp 5–35. New York, NY:  John Wiley & Sons, Ltd.
  • Chuma, J.; Mulupi, S.; & McIntyre, D. (2013). Providing Financial Protection and Funding Health Service Benefits for the Informal Sector:  Evidence from Sub-Saharan Africa. Working Paper No. 2. South Africa:  UK Department for International Development.
  • da Silva, C. & Rankin, M. (Eds.). (2013). Contract farming for inclusive market access. Rome, Italy:  Food and Agricultural Organization.
  • Deutsche Gesellschaft für Internationale Zusammenarbeit (GTZ). (2010). Scoping Mission for an Agricultural Insurance Feasibility Study in Brazil (Amazônia and Mata Atlântica). Berlin, Germany:  GTZ.
  • India Insurance Regulation and Development Authority (IRDA).2014. Annual Report 2013-2014. New Delhi, India:  IRDA.
  • La Forgia, G. & Nagpal, S. (2012). Government-Sponsored Health Insurance in India. Are You Covered? Washington, DC:  World Bank Group.
  • Sinha, T. (2005). The Indian Insurance Industry:  Challenges and Prospects.
  • Yellaiah, J. (2013). Health Insurance in India:  Rajiv Aarogyasri Health Insurance Scheme in Andhra Pradesh. In International Organization of Scientific Research (IOSR) -Journal of Humanities and Social Science. Volume 8, Issue 1 (Jan. - Feb. 2013), pp. 07-14.  IOSR.
  • Global Health and Foreign Policy, GA Res 66/115, United Nations General Assembly, 66th Sess, 2012.
  • Nicolle, E. & Mathauer,I. (2010). Administrative Costs of Health Insurance Schemes:  Exploring the Reasons for their Variability. Discussion paper 08/2010. Geneva, Switzerland:  World Health Organization.