Deve eloping In nsurance e Solution ns for Alll Haitians s ng a Local Insurer Boostin Haitianss of all econom mic levels are e interested in n buying insurrance productts, increasing gly so in the a aftermath of th he devastating g earthqua ake of 2010. One traditional insurance e company wh hose reputatio on was enhan nced after honoring an unp precedented number of claims ste emming from that t earthquake has a strategic growth plan to expan nd services and products tto the most vulnerab ble Haitians. Haitian-owned Altern native Insuran nce Company AIC is makin ng insurance m more accessiible with a pla an to expand affordable funeral a and credit life e insurance in the lower-inc come market and to create e new micro-in nsurance pro oducts. Yet A AIC’s financial reservess were depletted after the earthquake e an nd despite strrong growth th he company n needed to clo ose an equity gap. The Inte er-American Bank’s B Opportunities for the Majority Inittiative (OMJ) is a critical ca atalyst in the recapitalizatio on of this market lleader. OMJ is lending AIC C $2 million in n the form of subordinated d debt as partt of an overall $8 million recapitalization plan and d has played a critical role in mobilizing investors from the US, Ca anada, Mexic o and Haiti to o invest in the e private, Haitian-owned compa any. More In nsurance for the Poor in Haiti serving low-incom While AIC is the top micro-insurer m me communitie es that are larrgely exclude ed from the formal financial sector, it currently do oes the bulk of o its business s through traditional insura nce products for auto, com mmercial, prop perty, health and life. The compan ny is estimate ed to have a third t of the Ha aitian insuran ce market. R Responsible h handling of an n unprece edented numb ber of claims in 2010 sprea ad word of AIC C’s good pracctices and he elped increase e its market share. The compan ny is profitable e and growing g fast, with rec cord premium ms and net inccome in 2011. atastrophe, illnesses and a death in the People a at the base of the pyramid are more vullnerable to the effects of ca e family— especially if that pers son is the hou usehold bread dwinner. Fun neral costs ca an bankrupt a family. Losin ng a house in n a natural disasterr can be ruino ous. AIC offe ers micro-insu urance for funeral and cred dit life and is expanding e its portfolio of m mass-market o offerings for lo ow-income Haitianss, who make up u the vast majority m of the population. Products bei ng developed d are tailored to a populatio on with little access tto credit and few, if any, as ssets. The policies p would d pay off micrroloans in casse of catastro ophe or hospittalization and offer a ssavings beneffit as part of life insurance. Wider R Reach throug gh Platforms s Working g through micro-finance ins stitutions and other existing g platforms to o make insura ance accessib ble to as man ny people as possible e while keepin ng premiums affordable, AIC aims to do ouble its custo omer base ovver five years.. Base of the e Pyramid business is expected d to grow at an n average of 35 % for fune eral policies a and 10 % for ccredit life. Olivvier Barrau, A AIC’s founder and CEO O says: “We want w to impro ove lives of those less fortu unate and pig ggyback on structures that are already in n place to keep co osts as low as s possible. “ As A a result, an nd thanks in part p to the str ucturing of ce ertain premium ms, AIC’s ren newal rates for funeral iinsurance hav ve skyrockete ed. g Industry Sta andards Raising Haiti’s in nsurance indu ustry is one of the least developed in the e world, and tthe 2010 eartthquake with its vast ensuiing losses made clear the need for stronger legislation l and supervision n that would ccatalyze the growth of the iindustry. A w winner of the oneers for Prosperity awarrd, which aims to create grreater prospe erity in emergiing markets b by harnessing g the power off 2008 Pio private e enterprise sollutions to pov verty, AIC is working w to solv ve the questio on of how to b bring insurancce to the poor. It is also working to move the country’s industry standarrd towards gre eater transpa rency and bring it more in line with interrnational norms a and standards s. OMJ’s sup pport of AIC’s recapitalizatio on is helping low-income H Haitians incre ease their acccess to insurancce while stren ngthening the country’s ins surance indus stry.
For more information abbout the progrram contact OM MJ‐IDB@iadb..org