First Micro Insurance Agency Pakistan (FMiA-Pakistan)
Country of Operation
- Aga Khan Agency for Microfinance (AKAM)Not-for-profit
- New Jubilee LifeFor-profit
SummaryFirst Micro Insurance Agency Pakistan (FMiA-Pakistan) was the first to develop, market and manage life and health insurance products for low-income communities in Pakistan. The program was discontinued in 2011.
FMiA hoped to demonstrate a commercially viable model that would provide insurance to underserved groups not only in Pakistan, but in similar markets worldwide, such as Tanzania. FMiA provides credit-life and health insurance to help protect poor families from financial shocks and to prevent them from falling further below the poverty line.
Key program components
With the support of the Aga Khan Foundation, village organizations market the voluntary FMiA product and collect premiums under the guidance of the partner microfinance institution, First Microfinance Bank Pakistan in Karachi and Buksh in Lahore. In order to be eligible to enroll, the insured must live within the territory of a legally registered and participating Local Service Organization and enroll all family members. The insured pays an annual premium of US$6 (400 PRs) per person at the time of enrollment. Once the village organization achieves the minimum take-up rate for the group policy and enrolls at least 50% of the registered member households, the premiums are sent to the underwriter, New Jubilee Insurance, a subsidiary of the Aga Khan Fund for Economic Development.
Policyholders and their families are entitled to inpatient medical treatment (including maternity care) up to US$362 (25,000 PRs) per person per year, life insurance for one family member age 18-60 valued up to US$362, and prenatal care (four check ups, five tests, nutritional supplements) and postnatal checkups. Treatment for self-inflicted wounds, procedures that are not medically necessary, and substance-abused related injuries are not covered. All enrolled families also receive one voucher per person per year for a free consultation with a medical officer at an Aga Khan Health Services Pakistan (AKHSP) facility or a consultant at a Combined Military Hospital (CMH), in addition to access to 24-hour call centers and discounted medicines (as of June 2010).
The AKAM Microinsurance Initiative, which began in 2006, represents one of the first concerted efforts to develop the market for microinsurance globally.