MR Microinsurance_2012_03_29.indd - International Labour ...

Teaching elephants to dance
– New entrants: Th e market has seen interest from and entry by insurers not previously
concerned with the low-income market. For example, general insurers in
South Africa, Santam and Mutual and Federal, have developed products providing
buildings and contents insurance for low-income households. Because of the
regulatory requirement in India (see Chapter 20), multinational insurers operating
there are becoming exposed to microinsurance and some are beginning to
export the lessons learned.
– New products: Commercial insurers have expanded their product range beyond
credit life (see Chapter 9), funeral insurance (see Chapter 10) and simple accidental
death and disability policies. Other products such as property insurance, indexbased
crop insurance (see Chapter 11), fi re assistance and commuter insurance are
showing promise (see Box 19.1).
– Innovation in intermediation: Insurers are taking advantage of advances in
information and communications technology (see Chapter 24) and opportunities
for linking with aggregator groups (see Box 19.2) to expand into new markets.
– Level of competition: Although fi rst-mover advantage is still very important in
establishing a relationship with partners and accessing the market, some markets,
such as Colombia, India and South Africa, are experiencing increasing competition
for microinsurance business. Group funeral insurance and credit life are
highly contested markets, with distribution channels actively comparing quotes,
commission and service levels when selecting an insurer to underwrite the cover.
Box 19.1 Increasing diversity of products by commercial insurers
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Commercial interest in the provision of microinsurance has resulted in the pro- pro-
liferation of diff erent types of microinsurance products across the globe:
– Kenya Orient Insurance re-launched the Safari Bima product in 2010
providing accidental death, disability and health insurance to commuters.
– In 2008, Mutual and Federal piloted livestock insurance covering small-scale
farmers in South Africa.
– Allianz launched a savings life insurance product in India in 2008, attracting
three million policyholders and over US$100m in annual premiums.
– Also in India, Agriculture Insurance Corporation, IFFCO-Tokio and ICICI
Lombard are participating in a subsidized weather-based crop insurance
scheme for farmers. Having seen the opportunity, more commercial insurers
have applied to be part of the scheme for the next cropping season. Reinsurers
have also shown keen interest in reinsuring this scheme.
– In Jordan, Zurich launched a hospital cash product marketed as “Caregiver”
and distributed by MicroFund for Women, which is affi liated to Women’s
World Banking.