In the precarious world of the poor, a shock such as illness, death of a loved one, fire or theft can erode hard won gains on the slow road out of poverty. Though poor people have developed a variety of formal and informal ways of coping with crisis, they now have a new option, microinsurance. With fewer assets and lower incomes than most traditional insurance clients, poor people often are hit harder by shocks. Field research conducted in Tanzania, Kenya and Uganda in May and June 2002 suggests that there is a strong demand among poor people for better ways to manage risk. Microinsurance can respond to this demand through products and services tailored to poor people’s needs. The research from East Africa helps us to identify and develop appropriate products by addressing the questions, “What is the impact of shock on poor households? How do they cope? Is there a role for microinsurance?” This Briefing Note summarises the impact of crises/shocks such as illness, death, theft or fire on poor households, their coping mechanism and the role of microinsurance in reducing the vulnerabilities of the poor. It examines the immediate and long term impact of these shocks and the corresponding needs of the people and then discusses available mechanisms to manage risks, i.e. primarily the informal group-based and self-insurance mechanisms. On the other side it also looks at the gender aspect and sheds light on the fact that with limited or no control over assets, it becomes difficult for women to mange risk or to cope with shocks.