MR Microinsurance_2012_03_29.indd - International Labour ...

296 Insurance and the low-income market
education, for example the Department of Education or financial-sector regulator
(Smith et al., 2010).
SAIA is looking for ways to link education to the marketing efforts of individual
insurers. This is not easy, as an insurance association cannot promote the
products of just one company. Approaches that have been tested by other associations
include introducing a basket of products from different insurers, providing
insurers with the details of various activities and opening an opportunity for
them to be creative in building on them, and introducing vouchers with price
discounts and promotions by different insurers (and distributing them randomly)
(Smith et al., 2010). Most SAIA members now believe that it makes sense
to pool resources for financial education as they can together create an insurance
culture more effectively than through individual, uncoordinated actions.
FUNDASEG, the foundation of the Colombian insurance federation
(Fasecolda), provides another example of an insurance education campaign with
a long-term focus. FUNDASEG’s education programmes are targeted at improving
financial literacy among low-income households. The content includes a
strong risk management and insurance component that is aimed at improving
awareness of insurance amongst the low-income population. The programme is,
however, not linked to specific products.
Each setting provides a different landscape of potential partnerships and
options to deliver consumer education. Links to social programmes, government
financial education initiatives, school education and consumer protection initiatives
need to be explored. Consumer education should be delivered by multiple
stakeholders, who should focus on their responsibilities vis-à-vis society and
exploit their strengths to improve welfare. When a strong industry or government
initiative exists, practitioners should explore partnerships with these initiatives.
In the absence of broad initiatives, microinsurance practitioners can start
individual programmes that demonstrate success to encourage broader consumer
education initiatives. The private sector is well placed to pioneer consumer education
as in the SAIA and FUNDASEG examples above. Yet, private collaboration
is not common practice in most microinsurance markets, leading to the
question of whether and how governments and donors can play a more active
role in facilitating the creation of such public goods.
Each of the business models has specific strengths and challenges, as shown in
Table 14.2.