Swiss Re provides Haiti’s micro entrepreneurs with insurance proceeds after devastating rainfall

An innovative microinsurance program shows how public-private partnerships can help shore up societal resilience in the areas that need it the most.

In early June, the southern part of Haiti was struck by heavy rainfall, which resulted in flooding, mudslides and loss of life. Earlier this year, Swiss Re helped implement a parametric insurance solution for micro-entrepreneurs in Haiti through Microinsurance Catastrophe Risk Organisation (MiCRO), an innovative donor-capitalised insurance facility. Under the terms of the contract, the proceeds will be swiftly released to help the affected micro entrepreneurs to cover their losses and begin the reconstruction process.

Coverage and comfort

Haiti's largest microfinance institution, Fonkoze, made coverage available to its 50,000 clients starting in January 2011 through the MiCRO initiative, which allows clients to pay for coverage at the outset of each new loan. Amongst those affected by the natural disaster was Lovencia Dorenancourt, one of Fonkoze's borrowers.  Ms. Dorenancourt, who runs a small business selling rice and bread in her village had already repaid Haitian gourdes 3,000 (USD 75) of her 11,000-Haitian gourde loan when the heavy rainfall forced her to abandon her home as well as her business inventory.



Ms. Dorenancourt lost her home
and business inventory due to
the rains

In April, prior to the flooding, Ms. Dorenancourt enrolled in the MiCRO insurance programme. Despite the hardship caused by the rains, she found comfort in the fact that her insurance coverage would absolve her original commercial loan, as well as provide her with a cash payment, allowing her to recover her life and livelihood within a reasonable timeframe. The insurance payment may even help her finish construction on a cinder-block house, which will provide better protection against the weather than the original mud structure could. Ms. Dorenancourt’s story shows how insurance can help drive and sustain economic development.

Once damage to the home and/or business assets for each client has been established, MiCRO will eliminate the value of the client’s debt and pay a fixed sum of Haitian gourdes 5,000 (~USD 125) for the rebuilding process. A new loan will also be made available as soon as each client is ready.

Public-private partnerships at work

"As terrible as the flooding disaster has been for the citizens of Haiti, it has demonstrated that the MiCRO structure works and will, in the short term, help micro-entrepreneurs in the affected areas to rebuild more quickly," said Anne Hastings, CEO of Fonkoze Financial Services.

"Ultimately, MiCRO’s tools will offer Haiti a more steady foundation for long-term economic stability and development. We are proud to begin the process of ending the vicious cycle of crippling financial devastation after natural disasters occur in this region, and we hope to employ similar programs in other regions with comparable challenges."

Reto Schnarwiler, Head Global Partnerships for Swiss Re in the Americas, Europe and Africa, explained “This is one of several public private partnerships that Swiss Re is involved with around the world, aiming to make societies more resilient. In practice, this means helping people get back on their feet faster and more efficiently through better disaster management measures and innovative disaster risk financing solutions.”

Find out more

External link: Swiss Television report on MiCRO(in German)

Updated 12 January 2012


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