The growth of microinsurance in developing countries iscurrently at the same point that insurance in developed nations was100 years ago, one report suggests—and companies willing to enterinto this unconventional business are already seeing someprofit.

A special report from A.M. Best Co., “The Potential ofMicroinsurance,” suggests insurance programs for theworld's lowest-income individuals have challenges ranging fromadverse selection to lack of profitability, but insurers“increasingly are inclined to include microinsurance in theirlong-term strategies.”

The programs are similar to low-cost transactions, simple-riskcoverage and low-net-worth clients that were once found inhome-service or industry-life policies around the turn of the 20thcentury in the United States and United Kingdom, the ratings agencysays.

The lowest-income individuals in developing nations are in needof insurance programs the developed world has long embraced, thereport notes. Those coverage needs involve illness, naturaldisaster, livestock disease, accident and property loss.