Finding some good in 'bad old corporations'

It's a bad time to be a big company.

Bankers know this quite well, having been relegated by politicians and much of the world's media to a status only slightly higher than the Prince of Darkness. It was they, the argument goes, who got us into this mess.

Insurers have been able to deflect some of the criticism by shouting long and hard that they are not the same as banks. They argue that they collect money instead of loaning it to people who can't pay it back, and are far less inclined than banks to invest in products no one understands. Nonetheless, conventional wisdom says giant insurance companies must be evil if they are in the same branch of commerce as American International Group Inc.

With so much vitriol clouding our vision, it's harder these days to see some of the good done by these “bad old corporations.”

Insurers' response to the earthquake in Haiti was the most recent example of providing help in dire circumstances. Millions of dollars in aid went to Haitians thanks to insurers, brokers and others related to the industry.

While insurers often are out front with help during catastrophes, they have begun working in recent years with organizations on a less visible way to ease misfortunes of people in emerging nations. Insurers are developing microinsurance aimed at giving these populations access to care and peace of mind they might otherwise never find.

Microinsurance is low-premium, low-limit coverage for individuals and small businesses that typically can't find or afford traditional insurance.

Pharmaceutical maker F. Hoffmann-La Roche Ltd. in Basel, Switzerland, also is in a line of work that doesn't always get glowing media coverage. Big Pharma often is regarded by the general public with the same disdain as automobile dealerships, selling products at vastly inflated prices that consumers are forced to pay because they can't do without a car or medicine.

But Roche is quietly working on a project with insurers and reinsurers to use microinsurance to expand access to expensive cancer treatments in emerging nations, said Catherine Steele, head of international communications and public policy at Roche. “We saw an opportunity for insurers to provide affordable cover for the reimbursement of the costs of cancer treatment,” she said.

Call it insurance in small doses.

Cynics will say it is natural that Roche would back an insurance program that encourages sales of its product, but Ms. Steele said the plan being discussed would “provide access to all cancer medicines,” not just Roche products.

A January report, “Insurance in Developing Countries: Exploring Opportunities in Microinsurance,” by Lloyd's of London said commercial insurers would be wise to participate in the microinsurance market.

Besides profits, the report said microinsurance can provide insurers with larger, more diversified risk pools, “benefits to reputation, and market intelligence and innovation that can be applied to other business activities.”

Zurich Financial Services Ltd. is one insurer that has seen the upside of writing small policies. Its Z Zurich Foundation this year contributed 3 million Swiss francs ($2.8 million) to the International Labor Organization's Microinsurance Innovation Facility founded in 2008 with a grant from the Bill & Melinda Gates Foundation. It works with private-sector companies to implement microinsurance projects to serve low-income populations.

Zurich CEO Martin Senn said not only is su-ch an approach good for the bottom line, “it is important to underpin our commitment to corporate responsibility and actively support the development of better insurance services for the less fortunate.”

In other words, those small doses of insurance can help cure big problems for the needy and make insurers healthier down the road.