Central America

SERINSA (Servicios Inclusivos, S.A) provides technical support for the promotion of microinsurance in Latin America

SerinsaServicios Inclusivos, S.A (SERINSA) is a social enterprise created by REDCAMIF to provide technical support for the promotion of microinsurance. It promotes a financial product used by the sector as a financial inclusion tool, in partnership with the Panamerican Life Insurance Group (PALIG) and Seguros América SA, with the support of ADA Luxembourg, the Foundation José Maria Covelo and the national microfinance networks.

To help reduce the negative economic impact caused by the future and uncertain risks of low-income population, the Microfinance Network of Central America and the Caribbean (REDCAMIF) has designed and implemented a project that provides the opportunity to its clients to protect themselves through microinsurance, which, in addition to reducing the risks, is aimed at a segment of the population traditionally excluded.

The project, entitled "Implementation of a Sustainable Enterprise Model for the Development of Microinsurance in Central America and Panama", was implemented between 2011 and 2015, with the support of the Grand Duchy of Luxembourg and the Inter-American Development Bank (IDB), through the Multilateral Investment Fund (FOMIN - Fondo Multilateral de Inversiones).

"During the implementation of the project, we observed that people with low incomes wanted to be more protected and cautious about the risks," says Mr. Fernando Guzmán, the President of Servicio Inclusivos S.A (SERINSA), a social company created by REDCAMIF aimed to give continuity to the project, provide technical assistance and training to promote microinsurance, which has, among other things, carried out a market study to identify the needs of the target audience. The results of the study showed that the areas most risky were life, accident and health. As a result, 7 products have been designed, but still regulators have licensed only 3 of them: life insurance, accident income insurance and health insurance in case of cancer

All three have basic covers, affordable costs and a simple purchase and claim process. They have been tested in Nicaragua, Honduras and El Salvador, where they are now sold by licensed insurers, thanks to a strategic alliance with the Pan-American life insurance group PALIG, present in 22 countries, and Seguros América S.A.

More than 76,000 policies sold in 2017
So far, the main users of microinsurance are the clients of microfinance institutions (MFIs), financial institutions and cooperatives. However, as training is conducted on the subject and applications are paid, more and more people trust and subscribe to them. 

"40,170 people took out microinsurance policies in 2016. Compared to the previous year, the number increased over the same period to 76,032 policies sold, and in the long term it should cover at least 50 % of the target market," explains M.Guzmán.

Distribution of microinsurance sales by country in 2017 (in%)
- El Salvador: 14%
- Nicaragua: 60%
- Honduras: 26%

In addition to this, Fernando Guzmán explains that the increase recorded this year in the placement of policies compared to those sold in 2016 is 190% in Nicaragua, 152% in El Salvador and 31% in Honduras. Despite this success, the industry admits that it has not been easy to pave the way for microinsurance among its potential customers. One of the main obstacles they faced was the lack of financial education and lack of insurance experience that characterizes this segment of the population. 

"Many consider insurance to be expensive, they have a negative perception of insurers and do not know that one of the main alternatives to mitigate risks at different stages of life is buying insurance that is adapted to their needs, their economic capacity and their risks," concluded Mr. Guzmán.

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