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Microinsurance and OSH: helping to cope with workplace risks

Work-related accidents and diseases take a grim toll every year. Although prevention can help improve occupational safety and health (OSH), microinsurance can also play a complementary role in coping with workplace risks and provide direct benefits to employers and workers. ILO Online reports.

Article | 02 July 2008

BRASILIA, Brazil (ILO Online) – Maciri worked as a production assistant in a Brazilian wood factory where he was responsible for handling and processing the wood. Married, with two children, he had worked in the industry since 2001.

One day, while he was processing the planks, he was distracted and got injured. One finger from his right hand got stuck between the wood plates cutting the nerve. After a medical check, it was stated that he lost 100 per cent his capacity to move his finger.

Maciri is one of the millions of people around the world who suffer non-fatal work-related accidents each year that result in at least three days’ absence from work. But injury is not an option for a small entrepreneur or for other employees like him, especially in the informal economy where many families rely on a sole breadwinner for survival.

“Disease, injury or death of the workers can roll back a life time of savings for their families while slowing down competitiveness and gains of a company”, says Craig Churchill, head of the ILO’s recently launched Microinsurance Innovation Facility (Note 1). “Improving access to insurance products can benefit all parties, but few efficient and valuable microinsurance products exist to serve persons mostly excluded from a regular protection system”.

Luckily, Maciri had subscribed to an insurance coverage programme here and received an indemnity of R$ 1,200 (US$ 748) that allowed him to recover without any worries by insuring that his financial needs were covered until he could return to work.

The insurance programme, called “PASI” (Note 2) or the Programa de assistencia social imediata, is an innovative social assistance programme that was launched in Brazil 20 years ago by MAPFRE, a large insurance company in Brazil. The programme offers extensive insurance coverage for the construction sector – which traditionally did not provide coverage for its workers. This target group of workers, who can face high risks on the job, was not considered as a viable market by other commercial insurers.

PASI/MAPFRE insurance products were directly proposed to workers, plant by plant. The only condition was the ability of a group of workers to pay together a monthly premium of US$ 15.00.

The PASI package provides insurance coverage for workers and their families in case of death, including the children, wife, husband or companion of the person suffering a fatality or total or partial disability, food assistance and funeral services.

Since the product was socially oriented and – most important – affordable, some workers’ unions started to lobby for it to be considered as an issue of employer-employee dialogue on the total remuneration benefit. When both parties agreed, employers became obligated by contract to fund totally or partially the cost of PASI for their workers. At the same time, PASI also includes coverage allowing employers to recover losses related to the interruption of the worker’s labour contract.

According to Mr. Churchill, the successful implementation of the PASI/MAPFRE approach can be attributed to the fact that is serves both workers as well as employers.

“If microinsurance is to expand and reach large numbers of uninsured poor persons, there will have to be some benefit that will need to accrue to the risk carriers, the insurers, at least in the long term”, he says.

Indeed PASI/MAPFRE became profitable after five years of activity largely because it achieved economies of scale, serving 2 million people.

PASI/MAPFRE’s concept spread quickly out the construction industry towards other sectors such as textiles, gas station workers, print company workers, domestic workers, and seamstresses, and now covers a massive number of workers affected by the difficult working conditions of their sector.

“The project has celebrated its 20th anniversary, but we don’t think the momentum has been reached as PASI keeps on contributing to a better work place and could be replicated in other industries in Brazil or elsewhere in Latin America: the potential to improve OSH through insurance is really high”, concludes Antonio Cassio dos Santos CEO of MAPFRE Insurance group for Brazil.

The 18th World Congress on Safety and Health at Work, in Seoul, Republic of Korea, 29 June – 2 July 2008, is the largest global event in occupational safety and health. The Congress aims to contribute to improving health and the prevention of accidents and diseases in the workplace through the exchange of information and good practices, and will involve more than 4,000 policy-makers, senior executives, safety and health professionals, employers' and workers' representatives and social security experts. The triennial Congress is jointly organized by the International Labour Organization (ILO) and the International Social Security Association (ISSA). The XVIII World Congress is hosted by the Korea Occupational Safety and Health Agency (KOSHA).

For more information, please contact Sarah Bel, the Microinsurance Innovation Facility’s Communication Officer (

Note 1 – The Microinsurance Innovation Facility, a five-year initiative of the ILO and the Bill & Melinda Gates Foundation, was launched in 2008 to stimulate the development of microinsurance for the working poor and focus on affordable products, sustainable models and consumers education. It provides innovation grants, technical assistance and has a research program to collect and disseminate good practices. Check or contact:

Note 2 – For more information, please contact the CEO of Mapfre Insurance group for Brazil M. Antonio Cassio dos Santos