Cooperative insurance development project : evaluation report

The League Insurance Companies (LIC), in conjunction with other U.S. insurers, is implementing the project. The evaluation covers the period 8/86-12/89 and focuses on assistance to insurers in Guatemala (FENACOAC), Honduras (FACACH), and Jamaica (NUCS-CIS). While activities in the three areas of project assistance (TA, technical studies, and technical seminars/training) have generally been useful, achievements in the project"s four benefit areas have varied widely. (1) The one benefit that can be clearly identified in all target groups is the generation of surplus funds. These have been used to further cooperative development -- except in the case of FACACH, which used the funds to cover losses in other departments, resulting in the placing of project activities in Honduras on hold. (2) Although some cooperative assets and activities are being protected with insurance in all countries, the main beneficiaries in many countries are credit unions and their members. Also, while various types of life insurance are offered in all countries, the same is not true of other types of insurance, e.g., property insurance. (3) Though data on the goal of expanding cooperative insurance to low-income persons are scarce, cooperative insurers, according to government regulators, are meeting a real need, since the cooperative market is of little interest to large commercial insurers. (4) Some institutional development has occurred, as evident in the graduation of various organizations from the project and the progressive movement of others towards the eventual establishment of an insurance cooperative or company, as opposed to remaining a non-risk bearing agency or a risk bearing department of a federation. Such progress has been slower than expected in Guatemala and Honduras. The quality of the original project documents (e.g., the proposal, the grant agreement) has not been maintained. In addition, LIC has not implemented effective monitoring and planning, developed specific workplans in cooperation with beneficiary organizations, or reported on activities in a systematic manner (only the 1987 report provides monitoring data). Neither A.I.D. nor the National Cooperative Business Association, the prime grantee, have provided sufficient guidance to LIC. A.I.D. has continued to extend the project despite its slow pace and despite the absence of a mid-term evaluation. Overall, a higher intensity of assistance could have resulted in greater impact. On the positive side, the project"s strength and the validity of A.I.D."s contribution lies in the project"s ability to mobilize a variety of resources -- from assistance from Japan and Singapore for the Philippines, to reinsurance for Bolivia, to loans for Peru and Ecuador. Argentinean insurers have been used for training events and technical studies, and the three project graduates -- Colombia, Ecuador, and Peru -- have hosted observation/training events.