Amplifying the social protection of tontines thanks to a reassurance scheme in Cameroon

Social Broker, a Cameroonian association, proposes to design and test the potential impact of “TontineRe”, a re-insurance-like product that allows Informal Associations with nano Financing Schemes (IAnFS) commonly called “tontines” to cede a portion of their risk, providing better reach and coverage for their insurance group subscription products.

Context

Many developing countries have defective National Social and Health Insurance Systems (NSHIS) particularly because it is difficult to collect contributions from and manage the informal sector, with direct negative impact on their productivity.

Tontines are widely used in the informal sector to cover against unpredictable events (health, unemployment, etc). As they receive unpredictable levels of contributions from their members, IAnFS are nevertheless compelled to prioritize less protective and easy-to-verify risks.

Innovation

Social Broker in partnership with Assurance Universelle du Golfe and Opti-Solution designed a Minimum Viable Product called “TontineRe” to offer subsidized re-insurance contracts to tontines in order to provide financing, stabilization, underwriting and managerial assistance.

FID’s funding aims to support Social Broker to foster the design of the IAnFS reinsurance scheme, strengthening institutional arrangements, and start building early evidence on its potential sustainability and impact.

Expected results

The proposed solution will meet members that are in culturally relevant, pervasive, and familiar informal associations already used for financial protection.

According to Social Broker, providing a reinsurance product to tontines will allow them to cede a part of their risk, improve their financial position and expand coverage to improve financial and social protection of their members. This will prevent members from sliding into poverty trap and insure new, more protective risks or expand to additional, more vulnerable members.