In most parts of Asia, insurance remains to be in the hands of commercial insurance corporations way beyond the reach of average working man. Despite the presence of big insurance companies, the percentage of people with insurance coverage is quite small. Many people are still not covered with insurance, a liability for the working class, and a lost opportunity for insurance companies. Insurance protection because of its high cost became a financial product for those with big surpluses and high earnings only. Most of those in the lower middle income strata of the population and the poor are left without protection.

Majority of the people are coping with this situation through indigenous informal mutual support mechanism like community savings and mutual self-help groups. These financial cooperation schemes are based on family and community ties. The traditional practice of informal financial cooperation at the community level makes the concept of a mutual benefit association (MBA) acceptable to ordinary people. Although the concept of a formal MBA is not new, it has not fully developed into an industry big enough to have impact on the lives of people especially the poor.

Mutual benefit associations in some countries worked more efficiently in a members-based organization or work setting with big number of workers and staff. The capacity to collect through salary deductions allowed the MBAs to mobilize financial resources efficiently. However, this condition became functional only among companies with a large number of workers or employees, but its services never reached out to the people outside of the companies.

At the community level, cooperatives and other self-help organizations work through communal savings program approximating insurance. Although accepted as a cooperative savings product, it has burdened the members whenever a big number of members die, since they have to contribute more often, draining their resources. The cooperative savings scheme lacks sophistication that will project future service cost and thus spread risks and makes the contribution more affordable.

This prompted the formation of micro-insurance program in areas where there are substantial number of cooperatives and microfinance institutions. These institutions, pooling the resources of the poor have mobilized resources that can match those of the big insurance companies. By designing insurance products for the poor, complete with sound actuarial computations, a large number of the poor are now covered. The micro-insurance movement is growing in Asia and it is envisioned to be a major player in the insurance industry in the coming years.