Summary |
The Reinsurance school takes participants through the steps of insurance and reinsurance business. They discuss the concept of risk, explain how individual risk differs from aggregated risk, and differences between the risk exposure of micro insurance units and that of their members, or the risk of larger underwriters. They explain the business process of micro insurance and discuss options to limit risk exposure of micro insurance schemes. Reinsurance is one of the options to pass on part of the risk of MIUS. In short, the purpose of the Reinsurance School is to demystify reinsurance for people engaged in, or supportive or sustaining micro insurance units.
Clearly, price makes a difference as well. Reinsurance would be of interest for microinsurance units operating at the bottom of the pyramid when its cost would be cheaper than retaining the risk exposure at the level of micro insurance units. Additionally, the administrative process of transacting with reinsurance has to be manageable. And, of course, MIUS will need to be able to obtain reinsurance in India, which is not always an easy task. Nevertheless, we shall discuss various ways in which micro insurance units could obtain reinsurance.
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