In partnership with the rural water associations, La Positiva plans to analyze farmers´ needs for risk coverage, sensitize distributors and consumers about the importance of insurance, and take advantage of the irrigation delivery system to distribute the products – premium payments will be bundled with water bills. Thanks to a technology component (partnership with Brightstar to support communication exchange and data management between the local associations and the insurer), the billing system will progressively become more automated, and should contribute to develop outreach, reduce premium costs and improve efficiency.
The originality of this project is to be found in the association between a commercial insurer and a grassroots organization that has a close access to the farmers, works on a daily basis with rural communities, knows their needs and advocates for farmers rights. The Facility is keen to support the innovative distribution system via the water associations as an alternative to the more common practise of linking microinsurance to another financial product.
The consortium has some interesting ideas in terms of market education. They plan to use visual material such as video, board games and posters in local languages (Aymara and Quechua) to ensure a better understanding and ownership of microinsurance. I the project succeeds, the new products could reach very significant numbers of low-income workers and the model could positively influence the industry.
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In this project, La Positiva is targeting farmers, rural workers and their families. Through the water associations, it expects to serve 1.6 million households. Most of the association members do not use banks or MFIs, and therefore the collaboration with these grassroots organizations trusted by local communities enables the insurer to reach a market that it otherwise would not be able to serve.
La Positiva, a general insurance company, founded 69 years ago, is one of the most prominent insurers in Peru with 2 millions clients and brokers covering most of the country. It is active in the provision of health, asset and accident insurance. La Positiva has a solid experience in and commitment to microinsurance - its first products were offered in 1988.
"If you consider that 64% of the poor in Peru are located in rural areas, you can say that the project is quite ambitious as it aims to bring for the first time and on a massive scale microinsurance to farmers and their families and dramatically improve their livelihoods."
Gustavo Cerdeña, CEO, La Positiva
"The water associations are the key to success for microinsurance to reach the rural population which has been totally un-served by insurers even though 23% of Peru´s workforce is active in agricultural activities."
Auri Carrasco, Microinsurance manager, La Positiva
"The microinsurance project brings good news to all farmers´ families and rural workers as they no longer have to sell their livestock or borrow from their relatives to be able to prepare the final arrangements for their cherished deceased."
Ing. Enrique Málaga Málaga, President of the national water association from Peru
"We have been in need of microinsurance for a long time to feel protected from disease and death of one of our family members."
Farmer from Arequipa region
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