BVC July 2016 - page 11

Business View Caribbean - July 2016 11
The Financial Services Commission of Jamaica
(FSC) entered into a partnership with the Multilater-
al Investment Fund, which is a member of the Inter-
American Development Bank’s Access to Insurance
Initiative (A2ii), for a 3-year project ending in 2016,
to provide capacity-building and technical assistance
for the development of microinsurance business in
Microinsurance has been defined by the Interna-
tional Association of Insurance Supervisors (IAIS) as
“insurance that is accessed by low-income popula-
tion, provided by a variety of different entities…..” It
is a means of protecting low-income persons or the
“working class” against financial risks associated
with life’s unexpected events such as illness, death,
accident, or natural disasters, to name a few, that
can take away their income.
After the occurrence of certain natural disasters,
such as a hurricane, many low-income persons may
find it difficult to recover from losses incurred and
may be unable to financially sustain their livelihoods
and families. In such situations, their financial posi-
tion would worsen, especially if they operate micro
or small businesses. They may find it difficult to pur-
chase additional goods or pay creditors in order to
continue the business. In the case of farmers, they
may find it difficult to clear the land and purchase
additional seedlings to grow crops. Microinsurance
also helps in reducing the burden to the government
when disasters occur, because insurance will help
to cover losses sustained by low income individuals,
thus enhancing financial security and risk mitigation.
The distribution channel of microinsurance products
forms an integral process for low-income persons to
obtain insurance. Alternative entities, other than tra-
ditional insurance organizations, such as: telecom-
munication carriers, utility companies, and retailers
may be used to distribute microinsurance products.
Insurance companies may also form partnerships
with other financial institutions, for example, micro-
financing institutions and credit unions or other finan-
cial cooperatives to ensure that low income persons
have access to microinsurance products. Through
various approved entities, it is expected that micro-
insurance will be accessible by low income persons,
including self-employed persons in inner cities and
rural communities within Jamaica.
Here are some useful tips when shopping for in-
surance products to suit your needs:
1. Take advantage of discounted premiums available
through group insurance with an employer or other
organizations or associations of which you may be a
client or member.
2. Consider the income and expenses of your house-
hold on a weekly or monthly basis and decide how
much you can afford to pay for premiums.
3. Shop around and get at least three quotes.
4. Ask about other discounts that may be available
(for a good driving record, safety equipment, mul-
tiple policies with the same provider, etc.) to reduce
your cost of coverage.
5. Review your insurance coverage annually to make
sure you have appropriate coverage, as your situa-
tion changes.
6. Ensure you do business with a registered insur-
ance provider/agent.
7. As with all investments, be sure to get all the
facts, that is, terms and conditions, before parting
with your hard-earned money.
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