FSC making big push for micro insurance
The Financial Services Commission (FSC) aims to enable wide-scale delivery of micro insurance by next year.
The insurance regulator has committed to developing the regulatory framework to guide the sector and encourage its offering to people who have been unable to access coverage.
"Micro insurance is specifically designed for the lower income population who usually have little or no insurance," said Donna Swiderek, lead consultant of the Jamaica Micro Insurance Diagnostics Team. "It has much lower premiums and benefits and is easy to understand with no lengthy contracts."
Conceivably, individuals will be able to access micro insurance for as low as $500 a month.
"People in the lower income bracket show greatest demand for micro insurance products that offer coverage for loss of income due to weather, accidental death or injury, especially on the job, inability to work due to illness, death, and primarily funeral expenses and fire," said Swiderek.
A survey conducted across lower socio-economic groups in Jamaica showed that many believe "insurance is for rich people" because premiums are too high.
There are also negative perceptions surrounding lengthy wait times to collect claims and heavy claim documentation requirements.
Using the micro insurance sector as a case study, Swiderek argued that effective regulation can ensure that claims are settled in as little as ten days.
The consultant recommended financial education drive to promote insurance take up in Jamaica, but she went further to encourage the expansion of mandatory insurance product offerings, such as will be the case for fishermen, who will be required to have life insurance under the soon-to-be implemented Fisheries Act.
The FSC will lead the committee that will formulate the regulation, through consultation with insurance providers, distribution channels, government, regulators, supervisors and consumer protection agencies.