Waiting for the market? Microinsurance and development as anticipatory marketization

Abstract

This article traces experiments aimed at promoting wider adoption of ‘microinsurance’ – small, simplified insurance policies targeting the poorest. Microinsurance is a central element of a wider turn towards the promotion of ‘resilience’ in global development. The development of commercial markets for microinsurance, however, has failed to meet the expectations of promoters. This article traces the ways that the diverse donor agencies, professional organizations and philanthropic organizations involved in the promotion of microinsurance have responded to these failures, primarily by seeking to articulate basic data infrastructures that might make possible profitable insurance operations. These activities are described as a kind of ‘anticipatory marketization’ – experiments seeking to prepare the ground for the emergence of markets for risk management, thus far without much success. Where microinsurance has often been described in terms of ‘financialization’, this article suggests that there are important political dynamics at play that have been overlooked. Efforts to develop markets for microinsurance, and the persistent focus on troubleshooting and re-engineering those markets in the face of failure, are not driven directly by finance capital. Rather, they reflect fraught efforts to articulate modes of social protection not requiring substantial redistribution.

Uncertainty in the drylands: Rethinking in/formal insurance from pastoral East Africa

“…For instance, the multilateral Access to Insurance Initiative narrates the apparently inevitable substitution of formal insurance as a response to covariate risk: “Historically, when risks are too large for individuals to manage in their own right, they have looked to pool these risks. This pooling may start through relatively intuitive, informal risk pooling and later develops into more formalized products… and eventually, insurance products provided by formal insurers” (IAIS, 2010 page 13, in Bernards, 2022). Insurance historians have celebrated insurers’ dissemination of formal insurance as the leading edge of European market reason:[T]he insurance industry increasingly succeeded in … pushing back other forms of risk protection …Quite a few cultures … offered financial, legal, moral, and ethical resistance because insurance … altered traditional forms of living together just as much as it did morality and ethics.…”

“…Yet appearances can be deceiving. Despite their market-oriented appearance, index-based agricultural insurance programs have proven far less commercially successful than backers hoped and critics feared, and frequently remain heavily dependent on government subsidies and donor support (Aguiton, 2020; Bernards, 2022; Da Costa, 2013). The IBLI program itself is a prime example.…”

Perspective Chapter: Microinsurance’s Quest to Protect the Unprotected, beyond the Bismarck and Beveridge Models

“…Bernards [90] emphasizes the concerted efforts of various entities to develop actuarial practices suitable for microinsurance operations, with a particular focus on non-agricultural sectors. Main contributors to these efforts include the International Association of Insurance Supervisors (IAIS), the International Actuarial Association (IAA), private consultancies, and the Microinsurance Centre (MIC).…”

“…At the same time, digitizing processes can improve operational efficiency, reduce paperwork and redundancies, and expedite response times. However, given the limited interest shown by finance capital [90], the onus of developing microinsurance markets falls mainly upon the initiating organizations. This emphasizes the need for intentional market creation and demand stimulation [88] over spontaneous evolution.…”