MR Microinsurance_2012_03_29.indd - International Labour ...

422 Insurers and microinsurance
Building and managing partnerships
As illustrated in Chapter 22, there are numerous potential partners through
which insurers can gain access to the low-income market. Th e challenge lies in
fi nding them and negotiating a relationship that works best for both the insurer
and the partner.
To start building a relationship, insurers need to select partners that have
the best fi t with them and can perform the required functions. It is wise to
be aware of motivations and expectations from the outset, and to be
cautious where these are diff erent for the partners. Th e partner should provide
access to the intended target market, and/or be able to deliver other services
that the insurer needs. Th e partner also needs to be a good match for the
insurer operationally and from a systems point of view. A number of the risks
can be mitigated through a solid due diligence and selection process up-front,
and by involving the partner in the product development process (see Box
19.14).
Box 19.14 Importance of creating full buy-in at the partner level
A South African insurer partnering with a church group hit a snag at the initial
stages in marketing its household buildings and contents product to church
members. Th e insurer developed an elaborate marketing campaign for the
product, but failed to involve the partner in its development. Church leaders
refused to allow the insurer to roll out the marketing campaign. Although the
product was endorsed by the church leaders, it was not actively marketed
initially. Consequently, it has taken longer than anticipated to reach the targeted
volumes.
Partnering arrangements are most successful when the relationship off ers an
attractive value proposition to both parties. Th e interests of insurer and partner
need to be aligned in the sale and servicing of the products, and incentives
should be structured to facilitate this alignment. Structuring the arrangement
so that there are benefi ts to the partner besides commission revenue has
contributed to the success of some insurers in the market, for example by
increasing the utilization for healthcare providers and funeral parlours (see Box
19.15).