Microinsurance: social and health protection for less than a euro per month

The pandemic has shown the importance of having insurance to cover hospital expenses, temporary unemployment or death. These unexpected expenditures are a shock for people under vulnerable conditions and their household economy.

In 2021, the extreme poverty rate in Latin America increased up to 13.8%, which implies a 27-year setback with an estimated increase by approximately 5 million people, according to the latest annual report from the Economic Commission for Latin America and the Caribbean (ECLAC). Under these circumstances, having an insurance policy at hand with medical coverage and basic health care is available to only a few.  

Microinsurance are products tailored to address these needs and offer protection to low-income persons aiming to guarantee their well-being and security in the face of risks, all at affordable prices.  

I think it’s a great initiative and very important as well, in case of illness

The BBVA Microfinance Foundation (BBVAMF), in collaboration with insurance companies, has developed policies at affordable prices, mainly for less than 1EUR monthly. These microinsurance cover  from diagnosing serious illnesses such as Alzheimer or cancer, to life and disability coverage, maternity aid or medical attention for families.

Cancer coverage

Microserfin (BBVAMF’s Panamanian institution), in alliance with Mapfre Panamá and Corporación Continental, has recently launched a specialized cancer insurance for low-income women entrepreneurs. Most of them, like Ana, are heads of household and breadwinners, managing the homes’ resources and the only ones takingcare of the children.

“To face a cancer diagnosis or a health problem not only means higher expenses for them but also a decrease in income”, explained Edison Mejía, Microserfin’s General Manager. 88% of the Panamanian women live under vulnerable economic conditions and “our studies show that 82.7% of them don’t have any type of insurance because they can’t afford it.”

Ana Jaramillo, a Panamanian entrepreneur, acknowledges that it was a surprise to have received an offer to sign up for health care insurance. In many cases, the majority of low-income people can’t even fathom having access to this kind of service. She shares, “personally, I think it’s a great initiative and very important as well, in case of illness.”

Ana Jaramillo FMBBVA Panamá

Ana Jaramillo, Panamanian female entrepreneur working with Microserfin

This is the case for Leysi Guaitotó Salas, another entrepreneur from Microserfin, who took out a microinsurance, and said that “it’s an excellent aid, spectacular, because cancer is something we’re all exposed to yet nobody expects it”.

Since 2021, the Panamanian BBVAMF entity also has Microsaf microinsurance, specialized in funeral assistance. This policy seeks to protect microentrepreneurs and their families against any unexpected economic shock in the event of death.

Microinsurance with a gender perspective

Vulnerability in women is higher. According to the International Labor Organization (ILO) and UN Women, female participation in the labor market dropped to 56.4% in 2019 and up to 51.5% in 2020 (a 4.9 percentage point-drop, compared to 2.7% of men’s).

This is why BBVAMF designs tailored products and services for them, at the same time supporting working mothers. In the case of entrepreneurs it supports, 56% live alone (single, separated or widowed), with dependents under their care.

Bancamía, BBVAMF’s institution in Colombia, has recently launched the MAPFRE Mi Maternidad Protegida (My protected maternity), with special coverage such as support in paying their microloans. It also includes medical and psychological assistance, women’s health promotion and prevention, medical exam interpretation and analysis, legal orientation to protect their rights by way of a petition for protection and for medical procedures, among others.

Another example is the Bolso protegido (Mi protected purse) policy, for women in catalog sales who have to go door-to-door to sell their products. For less than 1€, they can protect their goods in case of theft.

According to then executive president, Miguel Angél Charria, after five years in this institution, “Bancamía is the main microinsurance actor in Colombia with 970,000 policies brokered, where more than 610,000 are voluntary insurance, tailored to the needs of this segment, with prices starting from 4,000 pesos monthly premium (less than 1EUR)”.

The BBVA Microfinance Foundation also has a microinsurance in Chile, called Mi familia protegida (My protected family) and covers entrepreneurs in case of accidents or accidental death. Furthermore, it offers other benefits for the family. Since its creation in 2017, more than 150,000 families have already benefited from this insurance, which gives medical, pediatric, geriatric and nutritional orientation via telephone and legal orientation (civil, penal, familiar, theft, among others) via telephone as well, costing approximately 1.2USD monthly.

Medical care for all

The pandemic has shone a light on the importance of having  microinsurance tailored to low-income people’s needs. This is why their economic situation has to be considered, as well as their payment capacity when making microinsurance services available for them.