The Inter-American Development Bank today announced its Multilateral Investment Fund (MIF) will invest $3 million in ParaLife, a new micro-insurance venture established to provide life insurance to people with disabilities, low-income families and microentrepreneurs in Latin America.
The micro-insurance project reflects the principles of the IDB’s Opportunities for the Majority initiative, which seeks to expand low-income people’s access to wealth-building tools and services such as microcredit, housing, job-training and entrepreneurship opportunities.
According to IDB estimates, there are more than 50 million people with disabilities in this region. They tend to have lower incomes, less formal education and higher levels of unemployment than the rest of the population. As a group they also have less access to formal financial services.
The new project will bring together seasoned insurance professionals, multilateral agencies, emerging market oriented investment funds and private investors interested in the development of efficient microfinance services for the benefit of disadvantaged people.
ParaLife, which plans to begin its operations in Mexico and later to expand to other countries in the region, will provide term life insurance products designed for segments of the population that are particularly vulnerable to risks such as natural disasters, severe illnesses and accidents, which can cause huge financial and economic setbacks for these households.
In addition to offering affordable life insurance to the disadvantaged, ParaLife will provide micro-entrepreneurship opportunities to people with disabilities with the necessary training made available through a system of ParaLife foundations.
ParaLife was founded by Rolf Hüppi, a former CEO and chairman of Zurich Financial Services. The ParaLife Group will include a reinsurance vehicle and partnerships with local insurance distribution organizations and leading local insurance companies in each of its markets. It is also supported by a leading global reinsurance company.
The MIF, an autonomous fund administered by the IDB, promotes private sector development and investment in Latin America and the Caribbean, with an emphasis on microenterprises and small businesses.
Since its establishment in 1992, the MIF has invested in equity or supported with loans and grants many of this region’s leading microfinance institutions, as well as innovative microfinance investment funds, microleasing and factoring ventures.