To date, the concept of disaster microinsurance for small businesses remains untested but there is engagement by stakeholders at all levels in microinsurance programs. An earlier project by AIDMI showed that the concept of disaster microinsurance for urban poor communities was viable and the partnering financial institutions are engaged in broadening products for this growing population. The clients of the previous community disaster insurance program expressed their desire for a similar product aimed at their own businesses.
There is also ample evidence that insurance mechanisms are effective risk mitigation strategies. While the vast majority of these micro-enterprises lack access to disaster insurance, there is evidence of need and when access is available to businesses, there is uptake of this type of insurance. This solution is very relevant for humanitarian response in urban populations as their needs, including food and healthcare, are primarily met by these small enterprises.
Micro-enterprise (very small business) disaster insurance would improve recovery of local markets that play a critical role in providing goods and services to vulnerable disaster affected populations in urban settings. It is a supply side intervention for local small business recovery and resilience. There is no existing risk management service for these very small businesses that are the primary markets for many in rapidly growing cities.
It adapts proven microfinance mechanisms to address a major part of the humanitarian crisis recovery process for which standards do not exist. As an insurance program, this innovation aims to enhance resilience among the small enterprises that are vital to these communities.
This innovation would make humanitarian efforts more cost-effective by mitigating risks and even changing pre-disaster behaviour based on risk financing. This innovation also protects gains made from development and previous humanitarian interventions by aiming to protect markets from the effects of future crises.
The innovation addresses local market recovery through disaster microinsurance. It is an intervention implemented in the pre-disaster phase to improve aid during the acute and recovery phase of a crisis in a sustainable and scalable way. Humanitarian response would be enhanced by a rapid recovery of these small enterprises. This innovation falls under both disaster prevention and preparedness through risk mitigation as well as reconstruction relief and rehabilitation with the insurance pay-outs.
Designing demand survey for urban informal small businessesView
Regional perspectives on finding insurance for DRRView
financial inclusion through disaster insurance?View
Protecting small businesses of urban area.View
The United India Insurance Company have analysed the data collected and helped develop a suitable microinsurance scheme.View
Lessons from the SSCBDAView
Clear on risk transfer and insurance.View
Insurance for informal sector.View
Reflections on a micro-insurance projectView
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