In most emerging economies, limited resources prevent extension of social protection to the whole population (especially vulnerable groups, including those in the informal economy). Microinsurance can complement social protection systems, and contribute to the achievement of other policy objectives, such as climate change adaptation, improved agricultural production, universal health coverage, overcoming market failures, achieving gender equity, and economic growth. 

Recognizing these benefits, governments are increasingly using insurance as a tool to achieve public policy objectives. Governments are using a carrot-and-stick approach by combining policy and regulation to stimulate market development and promote equitable access to insurance.