Emerging Project Lessons
By and large it is still too early to determine definitively if the capacity that we have acquired for MFIs/microinsurers thus far will have an appreciable effect on their ability to write more and/or better microinsurance business. Anecdotally, startup specialist insurers rarely have the capital necessary to assume significant underwriting risk out of the gate. They are also rarely able to access the intellectual capital necessary to navigate a new market successfully without encountering several “learning moments” along the way. These same maxims hold true for specialist microinsurers which, in GC Micro’s experience, tend to be highly reliant upon reinsurance capital and expertise.
Without microreinsurance advisory/placement assistance in the deals that we already have completed, many of the cedants we work with would have had to set aside much more capital to reserve against adverse loss activity on their subject business. However, with appropriate microreinsurance support these companies are now able to budget for potential losses with much more certainty and ensure their capital is put to efficient and effective use towards business development in other facets of the global microinsurance market.