Insurance as a development tool (or insurance: an effective but underutilized weapon in the fight against poverty)by Bumaco LTD on 09/08/15
The link between insurance and poverty reduction is not always in front of our minds. Many of us relate insurance to the ‘haves’. But at BUMACO, it has always been known that insurance is a service that is mostly needed by the ‘haves not’ than the ‘haves’. Insurance plays a key role in fighting poverty. As BUMACO exists to serve people in management and development, it has servie clients for 35 years in areas of rural development, risk management, micro financing, strategic planning, and feasibility studies among many other services that we offer. Since 1980, the Company has been at the forefront in the match against poverty in Tanzania and all over the world.
Insurance has been one of the Company’s core weapons in this match against poverty. In 1981, as part of its consulting services particularly in the area of risk management, the Company started an insurance agent to provide insurance services. As Tanzania adopted liberal policies in early 1990s, it got an opportunity to expand to insurance brokerage. In 2009, the Company took a further step of faith and established Insurance Company licensed to provide general insurance (marine and non-marine). The vision of Bumaco Insurance Company is - ‘insurance services with certainty’.
The match towards poverty eradication thus continues. But question remains, where and how does insurance comes in the fight against poverty? Last week during a coaching session to the Bumaco Insurance Company management team, the consultant, Mr. Nelson Kuria, who is an immediate former CEO of CIS Insurance Group of Kenya explained the way insurance fights poverty as follows:
- Insurance is a solution that empowers the people. It does so by enabling people to manage risks and assuring them of sustainable development.
- Insurance acts as a cushion for people from falling below where they are in case of a tragedy that can cause loss.
- It catalyzes development as it allows people to take more risks. It thus releases people from comfort zone into taking more risks.
- It acts and provides an immediate saving through low premium that covers a lot more.
In light of those, we all need to revisit our understanding of insurance in the developing world. We need to bring in insurance as a strategic tool in the fight against poverty. BUMACO understands this and that is why it has offered insurance policies to co-operatives (savings and credit societies- SACCOS) in rural settings. This is because it wants to cushions the farmers from falling back off. It wants to encourage them to save and take more risks by taking more loans so as they can increase their production levels.
So as to meet all its potential customers in Tanzania with the understanding that 70% are living in rural or low income regions, the Company is spread all over the country with agencies in low income regions and districts.