19. Micro-Insurance: Types – The Full-Service Model

In the Full-Service Model, the institution delivers micro-insurance services along with various other insurance products such as health, life, maternity protection, childcare, assets and livestock.

There are two different approaches of offering this kind of service. First, the insurance service provider may design various kinds of insurance products with different pricing for different products and offer options to potential members to choose the services as per their requirement. In this case, the members are free to select the designed products and they pay only for the chose product. Second, the institution may develop a packaged micro-insurance product combining various kinds of risks. They set a single premium for the whole package. Potential members cannot make choices from among the package. If they are interested, they have to buy the whole package. In this approach, members have a high possibility of receiving at least one kind of benefit each year as the package addresses more than one kind of risk.

The advantages of this model are:

Full range of insurance services: members have more choice on insurance services
Greater flexibility to adopt the services
Increase of effectiveness of all insurance services
Easy to design a new micro-insurance product based on broad experience gains in providing various other micro-insurance services
Cost-effective: integrated management system
Increased efficiency of operations

The disadvantages of this model are:

Cumbersome to manage many insurance services offered at the same time
Intensive monitoring is required at all times
Small CBOs cannot adopt this model as it requires relatively large institutional structure and strong management
Failure in delivering services will harm the reputation of the organisation to a large extent.