Opportunity International's Micro Insurance Agency to Develop and Provide
Life, Health and Crop Insurance for 21 Million Poor People
$24.2 million in new funding from the Bill & Melinda Gates Foundation to help
agency expand services in 11 new countries
OAK BROOK, Ill., Feb. 6 /PRNewswire-USNewswire/ -- Opportunity
International, one of the world's largest microfinance organizations, today
announced it has received a $24.2 million grant from the Bill & Melinda Gates
Foundation. The funding will help Opportunity International's subsidiary, the
Micro Insurance Agency, greatly expand its insurance products to the poor in
Africa, Asia and Latin America and will enable the world's first stand-alone
microinsurance agency to enter 11 new countries and provide life, health and
crop insurance to 21 million poor people by 2012.
Microinsurance includes a range of products that can help the working poor
manage economic hardship such as flooding, drought, hospitalization, or a
death in the family. Workers in the developing world are more likely to
experience hardship that can make it impossible to rise out of poverty, yet
less than three percent of people in the world's 100 poorest countries have
any type of insurance to protect them from financial shock.
"Opportunity International is a trusted partner and the Micro Insurance
Agency has great leadership and experience in this nascent industry," said
Priya Jaisinghani, program officer at the Bill & Melinda Gates Foundation.
"They are committed to testing different insurance products, methodologies and
delivery systems all over the world, while helping to protect the poor from
the severe financial consequences they face in their daily lives. The
foundation is optimistic about the potential for microinsurance, and we have a
lot to learn about products and services that will truly provide value to
people living in poverty. We hope this grant will have tremendous impact by
combining learning with doing."
The funding is part of the foundation's Financial Services for the Poor
initiative, which is working with partners to develop and employ innovative
ways to bring a wide range of financial services, including microinsurance, to
people living in poverty throughout the developing world.
"The Bill & Melinda Gates Foundation grant will enable us to rapidly scale
up the agency so we can offer insurance to poor people who have never enjoyed
the basic protections that insurance provides," said Richard Leftley,
president of the Micro Insurance Agency. "We are grateful that the foundation
has acknowledged our capability to design, test and develop affordable
insurance products that will give the poor a measure of economic security that
doesn't exist in the developing world today."
An estimated 2.5 billion poor people worldwide have no access to
insurance, Leftley explained. Only 0.3 percent of the poor in Africa have any
insurance, and in 23 of the poorest 100 countries in the world, there is no
identified microinsurance activity. "In some African countries, there is much
education to be done because there isn't even a word for insurance in the
local languages," Leftley said.
Opportunity International began offering microinsurance in 2002 and
established the Micro Insurance Agency in 2005. Currently, the organization
has 675,000 life, credit or crop insurance policies covering 3.3 million poor
people in 10 African and Asian countries. Among its early innovations, the
microinsurance pioneer developed a viable life insurance product in Uganda
that includes coverage for persons with HIV/AIDS. In Malawi, a crop insurance
program protects farmers from severe drought that caused starvation in their
villages only a few years ago.
Will Enable Growth and New Products Including Health Insurance
The Micro Insurance Agency has developed innovations and technology to
create affordable insurance products for individuals and groups of the poor.
A typical life insurance policy costs about $1.50 per month and pays a death
benefit for the head of household, spouse or child. "This keeps the economic
shock of losing a family member from sending a working family back into
poverty," Leftley explained. The life insurance product is so popular that
about 40,000 new clients are signing up per month in the Philippines and
12,000 per month in Ghana.
In Malawi, the agency has successfully tested crop insurance for farmers
in a country that frequently experiences drought. The insurance is combined
with a loan that enables farmers to obtain higher quality, drought-resistant
seed and fertilizer. The two-year pilot has been so successful that the World
Bank, which provided initial funding, has selected the Micro Insurance Agency
to expand crop insurance throughout Sub-Saharan Africa in the coming years.
The Bill & Melinda Gates Foundation grant also will enable the agency to
expand into health insurance. "Health insurance is the most critical need of
the poor and the most limited today. Few products exist and most are
prohibitively expensive or are based on complicated models used in the
developed world," Leftley said. "Our plan is to develop affordable and
easy-to-use health insurance, and to enable 2.4 million people to gain access
to healthcare services as we test, refine and roll out new products over the
life of this grant."
The Micro Insurance Agency acts as an insurance broker and is working with
many large international insurance companies that underwrite the policies.
The organization has developed breakthrough efficiencies in its back-end
administration that make the insurance affordable and enable payment of claims
in an average of six days.
Third Bill & Melinda Gates Foundation Grant to Opportunity International
This is the third significant grant from the Bill & Melinda Gates
Foundation to Opportunity International since November 2005. The first two
awards -- $7.6 million in grants and a $10 million program related investment
loan -- are funding rapid expansion of the organization's banks for the poor
and technology innovations in Africa. The total amount provided to
Opportunity International by the Gates Foundation is $41.8 million.
"We are humbled and honored that the Bill & Melinda Gates Foundation,
which is so passionately committed to helping the poor work their way out of
poverty, has selected the Micro Insurance Agency to support its mission," said
Christopher A. Crane, president and CEO of Opportunity International. "The
agency will now be able to expand rapidly to give the poor protection against
the ravages of poverty and disease that they face in their daily lives."
Micro Insurance Agency
The Micro Insurance Agency is an insurance intermediary dedicated to
serving poor people with an affordable and suitable range of insurance
products. As the first stand-alone microinsurance agency, it is
well-positioned to create and offer scalable, simple and understandable life,
credit and crop insurance products. Through extensive market research and
insurance expertise, products are designed to be affordable to the poor and
sustainable for distributors and insurance companies. Established as a
subsidiary of Opportunity International in 2005, the Micro Insurance Agency
currently has 675,000 policies covering 3.3 million lives in 10 countries in
Africa and Asia.
Opportunity International
Opportunity International is committed to solving global poverty. Serving
approximately 1.1 million poor entrepreneurs in 28 developing countries,
Opportunity International is a pioneer in offering small business loans,
savings, insurance and training in basic business practices to women and men
living in chronic poverty. Founded in 1971 as one of the first microcredit
lenders, Opportunity International provides small loans -- sometimes as little
as $50 -- and other services that allow poor entrepreneurs to start or expand
a business, develop a steady income, provide for their families and create
jobs for their neighbors. Opportunity International maintains a network of
offices across the globe, with U.S. offices in Oak Brook, Ill. and San Diego.
For more information, visit http://www.opportunity.org.
Bill & Melinda Gates Foundation
Guided by the belief that every life has equal value, the Bill & Melinda
Gates Foundation works to help all people lead healthy, productive lives. In
developing countries, it focuses on improving people's health and giving them
the chance to lift themselves out of hunger and extreme poverty. In the
United States, it seeks to ensure that all people -- especially those with the
fewest resources -- have access to the opportunities they need to succeed in
school and life. Based in Seattle, the foundation is led by CEO Patty
Stonesifer and co-chair William H. Gates Sr., under the direction of Bill and
Melinda Gates and Warren Buffett.
SOURCE Opportunity International
media, Don Ingle, +1-630-242-4128, dingle@opportunity.org, or Cynthia
Greenwood, +1-847-404-8404, cgreenwood@opportunity.org, both of Opportunity
International
