MINISTER of Finance Dr Nigel Clarke has indicated that government will by next year begin to table legislation that will fast-track the development of micro-insurance locally.

The move, which has been talked about for a while and was first proposed a few years back, the minister said is to also rank among the growing list of pioneering steps taken by the country.

“We will table the micro-insurance legislation in 2023. This country has prioritised economic resilience and we also take risk mitigation and insurance seriously. We have a vested interest in making insurance more widely accessible and available in Jamaica. We will be the first country in Caricom to have micro-insurance legislation,” he said during his address at the just-concluded International Conference on Inclusive Insurance (ICII) held in Kingston.

First looked at as part of an overall strategy to safeguard against risks associated with climate and weather-related events, the proposed legislation is intended to make insurance more attractive and accessible for persons on small incomes and also for those small and micro-enterprises.

According to academic definitions, micro-insurance refers to providing insurance to low-income families. It focuses on the protection of a poor section of people against debt traps which can adversely affect their lives and livelihoods. Unlike generic products, micro-insurance helps in cutting costs for its consumers by putting in innovative constraints on coverage, time and usage.

Deemed largely inadequate in developing countries, where the poorer sections of society are often left out of insurance coverage, the introduction of micro-insurance has the potential to support the transformation and growth of emerging economies, offering a clear long-term growth strategy for insurers.

Referring to anecdotal data, ahead of the launch of its 2022 micro-insurance report, executive director of the Microinsurance Network Katharine Pulvermacher, speaking at the conference, noted that preliminary findings were already pointing to the opportunity for this type insurance remaining largely untapped.

The annual landscape studies, which have become an invaluable reference for stakeholders in the inclusive insurance arena, provides state-of-the-art market intelligence to directly inform strategic decisions which could support inclusive insurance initiatives such as micro-insurance programmes in developing countries. The 2022 study, which gathered responses from approximately 253 insurance providers across 34 countries in Africa, Asia and Latin America and the Caribbean, covers more than 900 products. It aims to provide the most comprehensive and up-to-date snapshot of how the market has developed since 2021, tracking uptake of inclusive insurance products and services, including micro-insurance.

President of the Insurance Association of Jamaica (IAJ) Sharon Donaldson, in welcoming the tabling of the legislations next year, said she hopes it can also be used as a template to mobilise other Caribbean partners to do the same.

Donaldson, who is also the managing director for regional insurance firm General Accident, said that with many other insurance companies operating across the Caribbean, the pioneering of micro-insurance will set the stage for more inclusive offerings across the region, helping also to reach scale in smaller territories.

“There certainly is a gap for this type of insurance in the market, especially for the underserved as they too need to have insurance coverage,” she said to the Jamaica Observer.