PARTNER
                       PROFILES




                MICROINSURANCE
               CATASTROPHE RISK
            ORGANISATION (MICRO)
                                      Haiti

                           GLOBAL INDEX
                  I N S U R A N C E FA C I L I T Y




FUNDED BY
                                                           PARTNER PROFILES

        Country                     Haiti
        Market launch               2011
        Clients                     61,097 women-owned micro-enterprises (2014)
        Partners                    Insurers: Alternative Insurance Company (AIC)
                                    Reinsurers: Swiss Re, MiCRO
                                    Delivery Channels: Fonkoze Financial Services (microfinance institution)

        Products                    Natural catastrophe and weather index insurance
        Insured Perils              Floods, hurricanes, earthquakes
        Total Insurance Portfolio   $7.97 million (Fonkoze 2014)
        Insurance Payouts           $8,897,427 (2012/3)
                                    [Haiti is one of the most disaster-prone countries in the world with earthquakes, hurricanes and flashfloods. MiCRO
                                    and Fonkoze have redesigned the index insurance portfolio product to reduce basis risk and excessive payouts.]

        Average Cost of Insurance   5.3% of value of microloan (MiCRO is covering up to 50 percent of premium cost)
        Development Impact          1.	 Micro-loans and Payouts: 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 $8.9 million payout in 2012/13 helped
                                        thousands of women-owned micro-enterprises repair damages, replace inventory and
                                        reopen businesses.
                                    2.	 Access to Finance: Index insurance gives Fonkoze the risk management financial protection they need
                                        to increase lending to their microenterprise clients although no hard figures are available on increased
                                        access to finance due to insurance.

        Background                  The average Fonkoze microloan is $200, and Fonkoze’s micro-loan portfolio is $9.6 million.

        Project Description         MiCRO is a reinsurance provider based in Barbados. MiCRO currently provides natural catastrophe and weather
                                    index insurance to microfinance institutions (MFIs), which in turn insure low-income micro-enterprises.

        Success Factors             The MiCRO pilot is still being tested. The key to success will be improving the rain, wind, and seismic
                                    parameters that guide the micro-insurance payouts so that both end clients and MFI distributors find the
                                    products more affordable and attractive.

        Challenges                  Due to basis risk (claims submitted by clients not matching payouts – and claims surpassing the payouts from
                                    MiCRO) - Fonkoze switched from micro-retail coverage for individual clients to portfolio coverage through
                                    the MFI. The biggest challenge now is helping Fonkoze assess its risk and determine the level of insurance
                                    coverage needed, while ensuring insurance premiums are affordable.

        Opportunities               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.

        Contacts                    Steve Mitchell, Chairman of the Board of MiCRO, smitchell@mercycorps.org
                                    Anne Hastings, Director MiCRO and Manager, Microfinance CEO Working Group, ahastings@accion.org
                                    Carlos Boelsterli, CEO MiCRO, cboelsterli@microrisk.org
                                    Websites: http://www.microrisk.org and http://www.fonkoze.org




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