MR Microinsurance_2012_03_29.indd - International Labour ...

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22 New frontiers in microinsurance distribution
Anja Smith, Herman Smit and Doubell Chamberlain
This chapter is adapted from Microinsurance Paper No. 8, published by the ILO’s Microinsurance Innovation
Facility. he authors would like to thank Aparna Dalal (ILO), Jeremy Leach (Hollard), Brandon Mathews
(Zurich), Michael J. McCord (Micro Insurance Centre), Pranav Prashad (ILO) and Dirk Reinhard
(Munich Re Foundation) for reviewing the paper. The case studies that contributed to this chapter were funded
by Swiss Development Cooperation and FinMark Trust.
Achieving scale through cost-effective distribution is one of the biggest challenges
for the development of viable, small premium products. To effectively reach as
large a client base as possible, the emphasis is increasingly falling on innovative
distribution models as alternatives to traditional microinsurance distribution,
which typically relies on microfinance institutions (MFIs).
During the last decade, insurance providers and distribution partners have
experimented with innovative ways to extend insurance to low-income households.
This chapter considers the experiences of 14 sets of microinsurance innovators
from Brazil, Colombia, India and South Africa which are using partnerships
to distribute insurance through the following channels: 1
– cash-based retailers, including supermarkets and clothing retailers, offering
simplified personal accident and funeral insurance products;
– credit-based retailers, such as furniture and electronic goods stores offering
credit life, extended warranties, personal accident and life insurance products;
– utility and telecommunications companies offering disability, unemployment,
personal accident and, in some cases, household structure insurance; and
– third-party bill payment providers offering personal accident and life insurance
products.
These models were selected because of their unique and interesting approaches
to both the product-development and distribution processes. Case studies on their
experiences were produced on the basis of information collected through interviews
with insurance providers, their distribution partners and, in some cases, with
third-party administrators or brokers. The interview information was supplemented
by evidence gathered from company websites and annual reports, as well
as available media reports and other research documents. Given that the case studies
are public documents, data that may provide a more detailed view on the success
1 The examples described in this chapter are drawn from the following case studies available at www.cenfri.
org: Smit and Smith, 2010a, 2010b; Smith and Smit, 2010a, 2010b, 2010c, 2010d; Smith, Smit and
Chamberlain, 2010; Zuluaga, 2010.