MR Microinsurance_2012_03_29.indd - International Labour ...

362 Insurance and the low-income market
MTAs’ net worth and/or require them to post large bonds resulting in limited
competition and high costs. Insurers may find some financial institutions resistant
to such a partnership if they view the insurer as competition. In the Philippines,
for example, Pioneer Life Inc. considered a partnership with an MTA to
promote its Savings and Wellness Clubs and the SparxX “savings product”. The
alliance was not possible, however, because most remittances go through banks
in the Philippines and the banks viewed SparxX as direct competition.
For partnerships between insurers and MTAs for a migration-linked product
to be successful, it is essential for both parties to be fully committed to the
project and the relationship. It can take significant time and resources to set up
the guidelines and systems to allow for the direct payment of premiums, and
explain to staff and customers how payments can be made. The MTAs need to be
convinced of the market potential of the product, which needs to be in line with
their other strategic goals.
Harnessing technology to facilitate premium payments
Online platforms and other technological innovations promise to reduce the
overall cost of money transfers and increase convenience. Some MTAs, including
Western Union, have already begun to introduce online platforms worldwide,
adding payments for utilities, credit cards, and financial services to their menus.
Safaricom, a mobile phone service provider in Kenya, has introduced money
transfer services (M-Pesa) via its mobile phone network. In partnership with
Vodafone, it is possible for Kenyans to send money home from the United Kingdom
via their mobile phones.
None of the programmes identified in this study have developed a platform
for the direct payment of insurance premiums, so it is difficult to know how
receptive migrants will be to these payment channels. It is likely to depend on
the level of computer and technology literacy of the target group, and their comfort
level and trust in such payment systems. It may also depend on whether
there is a supporting organization in the host country to direct migrants to the
site and answer their questions.
17.4.4 Claims verification and administration
Another challenge of cross-border insurance programmes is processing claims,
especially when the policyholder and the beneficiary are in different countries.
Obtaining the paperwork to meet claims requirements from abroad can be complex
and time-consuming, and not easily accessible to the migrant’s family back
home. To address this issue, some Home models offering repatriation insurance
manage claims through alliances with companies based in the host country that
support the claims process. For example, Banorte’s life and repatriation insurance