Actuarial Toolkit
The actuarial profession has an important role to play in developing, implementing and monitoring microinsurance schemes around the world. There are currently gaps in the awareness and application of actuarial principles and methods in microinsurance work. In particular, there is scope for improving the understanding of insurance and risk for frontline microinsurance practitioners.
The microinsurance toolkit is designed to introduce technical microinsurance practitioners to key actuarial principles through case studies and illustrative spreadsheets, supported by a stylised review of literature. This volunteer project is led by the UK actuarial microinsurance working party in association with Oxford University's Department of Statistics, and with financial support from the UK actuarial profession.
The toolkit is currently under development with a target released date of June 2012. For more information about the toolkit see our toolkit overview page.
For answers to common questions please see our FAQ below. For general enquiries please contact us.
Frequently Asked Questions (FAQ)
Questions addressed in the FAQ:
What is microinsurance?
What is the "Actuarial Profession"?
What do actuaries do?
What is the "UK Working Party on Microinsurance"?
Tell me about the Microinsurance Toolkit
Can the Microinsurance Toolkit be applied to specific situations?
What are the objectives of the Microinsurance Toolkit?
What are the contents of the Microinsurance Toolkit?
What areas of microinsurance are covered by the Microinsurance Toolkit?
I am an actuary. How can I learn more about microinsurance?
I am a microinsurance practitioner. How can I contribute?
I am a microinsurance practitioner. Can I gain an actuarial qualification linked to the toolkit?
I am a student. Can I contribute to the toolkit through my dissertation?
How is the toolkit licensed?
Can I use the toolkit as part of my education program?
Can I hire the toolkit team to develop my microinsurance training program?
Can I contribute a case study to the toolkit?
My question is not answered here? Who can I contact for information?
What is microinsurance? back to top
The precise definition of microinsurance is open to debate but many people understand it to be the protection of low income people against specific perils in exchange for regular premiums proportionate to the likelihood and cost of risk involved. This is essentially the same definition as one might use for regular insurance but the emphasis is on a clearly defined prescribed market i.e. the low income people. However, microinsurance is not just a scale-down version of regular insurance. The product and processes need to be completely re-engineered to meet the characteristics and preferences of the low-income market.
What is the "Actuarial Profession"? back to top
The Actuarial Profession represents the members of the Institute and Faculty of Actuaries externally and regulates those members for the benefit of the outside world. The Institute and Faculty is the chartered professional body for actuaries in the UK. More information about the Actuarial Profession can be found at http://www.actuaries.org.uk/
What do actuaries do? back to top
Actuaries apply mathematical and financial theories to solve real-life quantifiable problems. Actuaries work in many complex roles in insurance, healthcare, pensions, investments, banking, risk management etc. In a microinsurance context, actuaries can apply their analytical skills and judgment to work in various areas, including Pricing, Product Design, Reserving, Reinsurance, Investment, Project Assessment etc.
What is the "UK Working Party on Microinsurance"? back to top
Actuaries have a strong history of volunteerism, working together on actuarial issues outside of, but often complementary to, their work as a professional actuary (for example, for a current list of working parties in the field of general insurance, see here. The UK Working Party on Microinsurance began as such a working party, but has since grown to include actuaries and academics from around the world. However, many of our members do have links to the UK and the project has received financial support from the UK actuarial profession.
Tell me about the Microinsurance Toolkit back to top
With about 40 actuaries catering for a potential of about 4 billion people, we think there is a serious lack of actuarial knowledge and practices in microinsurance. The Microinsurance Toolkit is an actuarial public good, which is designed to educate microinsurance practitioners on actuarial principles, methods and best practices. It is a freely accessible online educational resource available to anyone who wants to access it. The toolkit is meant for grassroots microinsurance practitioners like development NGOs. It can also be used as an educational resource by international organizations involved in the development of microinsurance.
Can the Microinsurance Toolkit be applied to specific situations? back to top
The toolkit is not intended to be applied to a specific microinsurance situation. Its use necessitates modifications and expert judgement. The toolkit is meant to be used for educational purposes only. Specific microinsurance problems need to be analysed by the relevant experts in the context of their unique circumstances. The working group will not be held responsible for any financial consequences, directly or indirectly, arising from the use of the toolkit
What are the objectives of the Microinsurance Toolkit? back to top
The objective of the toolkit is to introduce microinsurance practitioners who are not actuaries to actuarial principles and methodologies to better help them serve their clients. Specifically, the toolkit may:
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Help practitioners to design better products for their clients;
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Help microinsurance organisations to manage their risk profile in a sustainable manner; and
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Empower microinsurance practitioners in interactions with third parties.
What are the contents of the Microinsurance Toolkit back to top
The toolkit consists of three interlinked sections
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A. Guidance notes on theoretical ‘best practices’ and literature reviews
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B. Spreadsheet models illustrating actuarial principles and methods
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C. Lessons learnt from real case studies with focus on actuarial lessons
Please note that Microinsurance Toolkit is not a software solution, but a combination of the above sections.
What areas of microinsurance are covered by the Microinsurance Toolkit? back to top
Currently, the toolkit covers general principles as well as three important classes of business: Agriculture; Life; and Health. Within each class, key areas such as product design, pricing and reserving are addressed.
I am an actuary. How can I learn more about microinsurance? back to top
You might want to start looking through the literature review which forms part of the toolkit. This is written for actuaries, and includes lots of good references.
The toolkit is run by members of the UK actuarial profession’s microinsurance Member Interest Group. In addition to the toolkit project the Member Interest Group runs events such as session meetings and webcasts on microinsurance, targeted at actuaries. If you are a UK actuary, you might want to join this Member Interest Group.
I am a microinsurance practitioner. How can I contribute? back to top
Please feel free to use the Microinsurance Toolkit and tell us what you think. This would help us address practical issues within the toolkit.
I am a microinsurance practitioner. Can I gain an actuarial qualification linked to the toolkit? back to top
No. The toolkit is for educational purposes but there is no actuarial qualification linked to the toolkit. The International Actuarial Association lists actuarial bodies around the world that offer actuarial qualifications. The Microinsurance Network includes a number of providers of education for microinsurance, some of whom offer qualifications. The toolkit is not yet part of a microinsurance education program.
I am a student. Can I contribute to the toolkit through my dissertation? back to top
Yes. Let us know which section you are interested in contributing to and we will try to pair you up with an actuarial mentor. For details about the different parts of the toolkit see here.
How is the toolkit licensed? back to top
Answer coming shortly (suggestions welcome)!
Can I use the toolkit as part of my education program? back to top
Yes, you can use all or part of the toolkit in your education program provided you provide attribution as described in the (forthcoming) license agreement. If you use the toolkit please do let us know how you use it and send us any suggestions you have for further improvements.
Can I hire the toolkit team to develop my microinsurance training program? back to top
No, the toolkit team is not available to develop independent microinsurance training programs. However, individuals who volunteer on the toolkit project may be willing and able to work with you as an individual. You can contact the toolkit team with any such requests.
Can I contribute a case study to the toolkit? back to top
Yes. We would be interested in practical microinsurance case studies. They could be included as a part of the toolkit after appropriate review.
My question is not answered here? Who can I contact for information? back to top
Please feel free to contact us with any question, comment or suggestion regarding the Microinsurance Toolkit.
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