Read at : Vietnam Net Bridge

http://english.vietnamnet.vn/social/2008/05/781729/

Poor to benefit from micro-insurance plan

VietNamNet Bridge – Many more low-income people in Vietnam will soon be able to access micro-finance insurance thanks to a project recently started by the International Fund for Agricultural Development (IFAD).

The project will enable people to buy micro-insurance through insurance brokers and agents who have strong ties to the low-income market. This project should lead to a substantial expansion of micro-insurance access for low-income families in Vietnam,” said a project spokesperson. At a seminar titled Good Practices on Micro-insurance in Hanoi last week, Nguyen Hai Huu, director of the Labour, Invalids and Social Affairs Ministry’s Social Sponsoring Department admitted there were few insurance products for disadvantaged people in Vietnam, although they comprised 40% of the nation’s population. Michael McCord, president of the US’s Micro-Insurance Centre agreed, saying low-income families throughout the world, including in the United States, had difficulty accessing low-income insurance products. “Insurance companies don’t pay attention to the low-income market because they think profits aren’t high enough,” he said.

Vietnam’s insurance market includes insurance and re-insurance companies, support organisations, insurance brokers and Government offices.

To promote the development of the micro-insurance market, both McCord and Huu agreed it was necessary to determine the role of all these parties.

While Government offices made and supervised regulations, supporting organisations, such as schools and farmers’ associations, have helped raise awareness of micro insurance in the community.

McCord said the Indian Government had created an effective delivery channel for micro-insurance through Internet cafes.

A study of low-income people in the world’s 100 poorest countries by the Micro-Insurance Centre found only three per cent, or 78mil, were covered by micro-insurance.

“While the market potential is two billion, we need more delivery channels apart from insurance finance companies,” he said. These could be unions, retailers, petrol stations, NGOs, employers and banks.

Many risks

Director Nguyen Hai Huu admitted lack of understanding and dissatisfaction with types of life insurance had limited the development of low-income insurance in Vietnam.
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It was also the first time the Government officially recognised microfinance institutions that belonged to the banking-financial system under SBV’s management.

(Source: Viet Nam News)

People on edge of poverty

The Government has earmarked VND700bil (US$43.7mil) to support people living just above the poverty line, the Ministry of Health’s Medical Insurance Department said. Under the plan, about 16mil people across the country will receive at least 50% in subsidies to help cover health insurance cards, each worth VND130,000 (US$8) per head per year. They should also be entitled to claim more subsidies from the provincial budget. Under the Labour, Invalids and Social Affairs Ministry’s instruction last Thursday, the average income of these households is between VND261,000 to 390,000 (about US$16-24) per person, per month in urban areas and from VND201,000 to 300,000 (about US$12-18) per person per month in rural areas.