Microfinance Focus, September 21, 2011: The Microinsurance Catastrophe Risk Organization (MiCRO) will develop a microinsurance model to insure Haiti’s women entrepreneurs against economic aftermath of cholera. The organization’s three co-founders - Mercy Corps, Haitian microfinance institution Fonkoze and global reinsurance company Swiss Re announced their commitment at the Clinton Global Initiative 2011 in New York on Tuesday.

The microinsurance model will use indicators of cholera, such as rainfall, to trigger an automatic insurance payout, speeding up the process of paying individual claims. A disease caused by water-borne bacteria, cholera cases unfailingly increase during rainy seasons.

Swiss Re will begin designing the cholera product next month and a pilot test will take place with existing Fonkoze women borrowers in the spring of 2012. Mercy Corps will work with Fonkoze to manage the distribution and educational rollout of the cholera microinsurance policy pilot test.

The cholera microinsurance policy will allow women who borrow from Fonkoze to receive an amendment to their loan contracts compensating them through loan reductions and emergency cash.

The heavy rains in June triggered an automatic payout from reinsurer Swiss Re, allowing Fonkoze to reimburse more than US$1 million in damages and loan reimbursements for nearly 4,000 of its small business owners. Payments from Fonkoze eliminated the value of the clients’ debt and paid a fixed sum for the business rebuilding process.

MiCRO was formed in March 2011 by a syndicate of strategic stakeholders with the long-term goal of offering micro-insurance to the most vulnerable communities throughout the world. It was recently awarded “2011 Company Launch of the Year” by The Review, a global insurance trade publication, and recognized as the year’s “most significant new venture in an area of market need.”