Microinsurance – potential for development in Bulgaria

Abstract

According to the World Bank 1.5% of the Bulgarian population lives below $1.90 per day. For a population of Bulgaria as of 31st December 2014, comprising 7 202 198 people, this share covers approximately 108 032 people. At the same time, in relation to the implementation of social assistance activities, according to the Social Assistance Act (SAA) and the Regulation on the Implementation of the Social Assistance Act (RISAA), from the begging of 2014 until the end of December of the same year under the Regulation on the Implementation of the Social Assistance Act with one-of, targeted and monthly social benefits in the country, a total of 63 932 persons and families were supported. This fact demonstrates an alarming trend in particular that not a small number of people remain out of the coverage of the publicly organized social assistance system – approximately 44 100 people, who are not eligible for social benefits for various reasons. All this gives us reason to look for alternative solutions to improve social protection, especially to those being absolutely poor in our country. One of these alternatives, which is widespread in the world and unfortunately almost unknown in our country, is microinsurance. The latter has the potential to increase the social security of those who are in extreme poverty and to expand the activity of the insurance companies in Bulgaria.