Access to Finance: Developing the Microinsurance Market in Mongolia

Date: May 2014
Type: Reports
ISBN: 978-92-9254-482-9 (print), 978-92-9254-483-6 (web)
Price: US$22.00 (hard copy)
Author: Rendek, Kelly; Wiedmaier-Pfister, Martina


Mongolia experienced a challenging transition from socialist economy to market economy from 1990 onwards. Its commercial insurance market is still at its infancy, with gross written premiums in 2013 amounting to only 0.54% of gross domestic production. ADB undertook this technical assistance study to support microinsurance development in Mongolia. The study provides an overview of the development of Mongolia’s insurance market in general and the microinsurance segment in particular, then identifies gaps in the insurance regulatory framework that need to be bridged to expand microinsurance coverage to more households.

A number of emerging lessons can be leveraged for future microinsurance development:

  • Private health microinsurance products in Mongolia need to be integrated with the benefits and structure of the existing public health system. Reimbursement procedures for insured medical expenses need to be carefully designed so that incentives for policyholders, insurers, and health care providers are appropriately aligned;
  • Cost-effective distribution is a key challenge given the large distances, low population density, and manual premium collection processes;
  • The willingness of insurance providers to proactively drive and participate in the microinsurance market is a crucial element. Commercial insurers have shown interest in developing microinsurance programs primarily due to the significant amount of available donor funding.

The development of microinsurance in Mongolia needs to be considered within the context of overall insurance market and regulatory environment development. It is difficult to develop the microinsurance market without a viable life insurance segment or a strong nonlife retail insurance focus. While certain regulatory achievements have already been made, there is an urgent need to improve the overall regulation and technical capacity of the insurance industry before the microinsurance segment can be sustainably developed.


  • Executive Summary
  • Introduction
  • Context
  • Insurance
  • Existing Microinsurance Landscape 
  • Estimating the Potential Demand for Microinsurance
  • Regulation, Supervision, and Policy
  • Key Drivers for the Microinsurance Market in Mongolia
  • Recommendations
  • Moving Forward 
  • Appendixes 
  • Bibliography