MR Microinsurance_2012_03_29.indd - International Labour ...

512 Delivery channels and intermediaries
ence with the relationship with New Jubilee Life in Pakistan did not prove a
significant benefit in the United Republic of Tanzania. Additionally, it took
nearly a year for FMiA Tanzania to be granted an agency licence.
Given the limited results and various challenges encountered, during a profound
strategic review of all AKAM’s operations it was decided to merge FMiA
Pakistan’s operations and client base into New Jubilee. This measure was viewed
as less costly than recapitalizing FMiA as an independent intermediary. The process
of integrating FMiA into New Jubilee and establishing a microinsurance
department began in May 2011. FMiA Tanzania was closed down and the limited
microinsurance activities in the country were phased out. The AKAM/FMiA
experience provides many valuable insights, but also highlights the difficulties on
the ground for a microinsurance intermediary striving to build up a sustainable
business, particularly with regard to introducing higher-value microinsurance
products with a strong social impact to the market.
23.2.2 MicroEnsure
Opportunity International, a non-profit microfinance support organization,
started laying the foundations for microinsurance operations in 2002. Three
years later it set up a dedicated, for-profit microinsurance intermediary, which
sold its first policy in early 2006. The rationale behind creating a separate, dedicated
microinsurance intermediary was to better serve Opportunity International’s
existing microfinance clients and to drive innovation and outreach on a larger
scale. Initially named the Micro Insurance Agency, this company has operated
since 2009 under the name MicroEnsure. In 2007, the Bill & Melinda Gates
Foundation awarded Opportunity International a US$24.2 million grant on the
premise that its MicroEnsure platform would trigger rapid geographical expansion
and the development of new products, thus leading to massively increased
numbers of microinsurance customers. In its press release relating to the grant,
Opportunity International stated that this would allow its subsidiary to enter 11
new countries, leading to 21 million poor people being insured by 2012.
At the end of 2010, MicroEnsure had active microinsurance subsidiaries in
five countries: Ghana, India, Kenya, Philippines and the United Republic of
Tanzania, serving 2.1 million end-clients (half of them in the Philippines alone).
Legally, MicroEnsure is registered in four of these countries as an insurance broker
and as a corporate agent in the fifth. In each of these countries, MicroEnsure
works with at least two insurance companies. Additionally, MicroEnsure began
experimenting with a franchise model3 in Mozambique and Rwanda, which
3 In this case, the franchise model reflects the use of systems and processes by local companies without
requiring MicroEnsure direct management.