Why A.M. Best is bullish on LatAm microinsurance

While insurers in Latin America do not focus on microinsurance as much as they do in other regions of the world, a large potential audience exists that could benefit from the product, according to A.M. Best senior managing director Andrea Keenan.

"Latin America is a much wealthier region than other microinsurance hubs such as Southeast Asia and Africa, and so microinsurance doesn't receive the same focus from companies as it does in those other regions," Keenan said on A.M. BestTV. "But the potential audience is still in the range of 150 million people."

Keenan said she is optimistic about the growth of microinsurance in Latin America: "Latin American insurance companies have a passion to provide this service and protection to their fellow Latin Americans. In the interest of offering a good product, which is going to help the community and also bring some additional profitability, I do believe that microinsurance has a positive future."

She said, however, the growth would take some time, adding that there are many things that can be done to overcome local challenges and improve the growth of microinsurance in Latin America.

"There can be more participation by governments ... and more knowledge and assistance from regulators," said Keenan. "But also, I think it would be interesting if companies really had an opportunity to see some of the potential communities that microinsurance would impact, and really try to find solutions that are tailor made to those audiences, which tend to be very different than most of their policy holders."