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Based on product type, the life micro insurance segment is poised to expand at 7% CAGR during the forecast period. Affordability is the foundation of the life microinsurance segment growth. Microinsurance policies are meticulously crafted to be financially accessible to individuals with limited incomes, ensuring that even those in low-economic strata can afford life coverage.
Premiums are structured to match the modest budgets of these policyholders, making life insurance affordable for a wider demographic. By keeping costs low, micro insurers cater to the needs of vulnerable communities and enable them to safeguard their families' financial future without imposing undue financial burden, thereby fostering financial security and inclusion among the low-income demographic.
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Based on the end use, the micro insurance market size of business segment dominated around USD 36 billion in 2023. The introduction of insurance products specifically catering to micro and small businesses is fueling growth within this segment. These customized offerings address the unique needs of small enterprises, providing them with affordable and relevant coverage.
For instance, in March 2023, TD Insurance introduced a specialized insurance product aimed at small businesses in Canada. This direct insurance offering is crafted to offer customized coverage for micro and small businesses operating in diverse sectors such as retail, contractors, wholesale, business, and professional services, as well as healthcare. By bridging the insurance gap for businesses in these sectors, insurers are fostering financial security. This targeted approach enhances accessibility and encourages micro and small businesses to invest in insurance, propelling market expansion.
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Asia Pacific micro insurance market accounted for 35% of the revenue share in 2023. Increased funding in micro insurance startups is proliferating the market growth. Investors' rising interest and financial support enable startups to innovate & expand their services and reach more underserved populations.
For instance, in June 2021, Bimaplan, an insurtech startup, completed a pre-series A funding round, securing USD 2.5 million. Notable participation came from prominent global venture capital firms including Amino Capital, Acequia Capital, Emphasis Ventures (EMVC), and Goodwater Capital. With more capital, these startups can develop customized, affordable insurance products, enhancing financial inclusion and security for individuals and small businesses. The influx of funding propels the market by encouraging innovations, improving accessibility, and ensuring the sustainability of micro insurance initiatives across the Asia Pacific region.