To be workable, solutions will have to address the very practical issues that have arisen repeatedly in discussions of microinsurance. The first is the need for reinsurance, the second is having data on which to base premiums, and the third is the ability to cut the costs of dealing with many small transactions.
A micro-insurance revolution could be a major step toward improving the well-being of the world’s poor, but, it is important to design products with a full picture of how the products will fit into clients’ lives (and possibly affect non-clients too). In that light, we should also bear in mind that micro-saving can be a key part of a household’s best insurance strategy.
We review 131 papers and find that the most severe problems stem from insufficient resources for risk evaluation, small size of insurance groups, information asymmetries, and the size of the insurance premium.They conclude:
Setting up microinsurers as cooperatives may be a way of combining the advantages of large institutions (e.g., diversification, economies of scale, and access to reinsurance) with those of local organizations (e.g., low transaction costs, access to information, and social enforcement mechanisms).
It seems that microinsurance as a product still isn't well understood by the clients/beneficiaries (see here). It seems also that training does not work that well for people to make the decision, but marketing does work (see here). There are some positive experiences (see here). And some critics (see here).
It remains an open and contested field for researchers and a possible opportunity for entrepreneurs and practitioners.