MR Microinsurance_2012_03_29.indd - International Labour ...

506 Delivery channels and intermediaries
For insurers using the partner-agent model, MFIs are the “low-hanging fruit”
in the microinsurance delivery channel landscape and could thus be characterized
as the most obvious direct avenue of microinsurance product distribution.
However, MFIs are limited in scope. Collectively, MFIs reach only 190 million
borrowers worldwide (Reed, 2011). Th is is less than half of the current microinsurance
outreach (see Chapter 1) and a fraction of the global potential microinsurance
market.
Discovering, unlocking or building alternative avenues of direct access to the
poor is crucial to the expansion of the microinsurance market. As illustrated in
Figure 23.2, a host of organizations and methods could be used to access the lowincome
market, but the development of these channels can be arduous and complicated
work. With the exception of MFIs, few potential delivery channels have
existing fi nancial relationships with the poor, and the fi nancial literacy of the
management of potential delivery channels can be limited. Intermediaries can
therefore play an important role in facilitating the delivery channel development
process.
Insurers and delivery channels often have trouble with communication. Th e
two parties have very diff erent motivations, systems, understanding of client
needs, and knowledge of insurance concepts. However, they agree that neither
wants to do much work beyond what is necessary to sell the product in a
straightforward way. Here, an intermediary’s knowledge of the low-income
market and attendant resources can play an important role by bridging the
knowledge and capacity gap between microinsurance clients and insurers. While
microinsurance intermediaries have additional capabilities, this bridging function
is a signifi cant component of their value proposition.
Figure 23.2 Delivery channels
Lowincome
people
Utilities
Service
providers
Volunteers
Credit
unions
MFIs and
NGOs
Health
workers
Churches
Employers
Insurance
agents
Cell phones
Retailers
Smart cards
Self-help
groups
Banks
On-line
& ATM
Computer
kiosks
Field
workers
Insurance
companies