MR Microinsurance_2012_03_29.indd - International Labour ...

Current trends in microinsurance
A third key driver is the development of effective payment systems. Collecting
microinsurance premiums can be a challenge, but emerging payment systems,
such as M-PESA mobile money in Kenya, are substantial drivers of
growth. In environments where e-money is not allowed, bill payment systems,
point-of-sale (PoS) networks and banking correspondents give insurers access to
large numbers of low-income households. For example, Aon Affinity, a subsidiary
of Aon, reports covering 12 million mostly low-income people through massmarket
schemes in six Latin American countries that access the client bases and
use the payment systems of electricity, telephone and water companies (Baptistini,
2011).
The experience of Aon highlights the fourth driver, the capacity of multinational
insurers and brokers to replicate their successes across jurisdictions.
Brokers Marsh and Guy Carpenter are involved in government schemes in India
covering tens of millions of low-income persons, and now they are taking those
experiences to other jurisdictions (see Chapter 23). In 2010, Allianz covered six
million low-income persons in eight countries (Coydon and Molitor, 2011),
while Zurich had 2.3 million policies covering “emerging consumers” in seven
countries, up from 1.8 million in 2009 (see Chapter 19).
Incremental improvements
The expansion of insurance to protect millions of low-income people is not only
happening through major leaps forward, but also through incremental improvements
that are gradually expanding microinsurance markets. Take-up continues
to expand because of a confluence of factors that bolster both the supply of and
demand for cover. Some incremental drivers include:
– The demonstration effect of positive claim payment experiences may have the
greatest impact on helping people to appreciate and purchase microinsurance.
– Enabling regulatory environments for financial inclusion in several countries are
removing barriers and even creating incentives for insurers to go down-market,
while creating pathways for informal insurers to participate in the formal market
(see Chapter 25). Unlike the government support described above, changes in the
regulatory environment generally result in incremental improvements rather
than major leaps forward, although there are some exceptions.
– Consumer education is reported to have helped people in some areas to better
understand microinsurance and its role in household risk management (see
Chapter 14).
– An improving value proposition for clients is resulting from insurers having
greater exposure to and familiarity with the low-income market (see Chapter 15).
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