Insurance is a risk management strategy. Loans may help a household to increase its income but they do not reduce the household's vulnerability or exposure to risks. Easily available savings may help to address this need as households can build reserves from which they can draw in emergency or to smooth cash flow imbalances. However, this still does not help if they are exposed to risks which cause losses that are beyond their means. Insurance products enable the risks faced by households to be pooled and thus provide protection against larger losses.