Knowledge All Insurance

Chapter One – The importance of insurance

1.1 The plight of the poor

Countless explanations have been put forward for the despairing situation of the many millions of poor people in developing countries. An understanding of these reasons and the characteristics of the poor are important when discussing the potential role of insurance mechanisms (Appendix One).

The livelihoods of citizens in countries with low human development

compared to high human development

HDI§ rank (from 174) 1998	Country	HDI value 1998	GDP per capita (PPP US$) 1998	Life expecta-ncy at birth (years) 1998	Adult literacy (% age 15 and above) 1998	GDI¨ value 1998	Population below income poverty line (%)	Under-five mortality rate (per 1000 live births) 1998	Doctors per 100,000 People 1992-95
1	Canada	0.935	23,582	79.1	99.0	0.932	5.9º	6	221
2	Norway	0.934	26,342	78.3	99.0	0.932	2.6º	4	-
3	United States	0.929	29,605	76.8	99.0	0.927	14.1º	8	245
172	Burkina Faso	0.303	870	44.7	22.2	0.290	61.2*	165	-
173	Niger	0.293	739	48.9	14.7	0.280	61.4*	280	3
174	Sierra Leone	0.252	458	37.9	31.0	-	57.0*	316	-

§HDI (Human development index) – composite index based on life expectancy, educational attainment and standard of living. A HDI value equal to or more than 0.800 has high human development, 0.500-0.799 HDI has medium human development and a HDI below 0.500 reflects low human development and well being.

¨GDI (Gender-related development index) – composite index using same variables as HDI but adjusted in accordance with the disparity in achievement between women and men. A GDI of less than 0.500 show that women in these countries suffer the double deprivation of low overall achievement in human development than men.

º Income poverty line is $14.40 a day (1985 PPP US$) 1989-95 –as used in HPI – 2 calculation

* Income poverty line is $1 a day (1993 PPP US$) 1989-1998–as used in HPI – 1 calculation

Source: UNDP (2000).