MR Microinsurance_2012_03_29.indd - International Labour ...

The technology revolution in microinsurance
via GPS to a central database at 15-minute intervals. By September 2011, 150 rain
gauges had been installed covering about 6 300 farmers (Prashad, 2011).
– Satellite imaging: Satellite images can be used to collect different weatherrelated
data. Satellites are able to capture images of cloud density that can be
used for generating rainfall predictions (Prashad, 2011).
Another approach is to use normalized differenced vegetation indexes
(NDVI), which are derived from data captured by satellite images permitting the
measurement of vegetative “greenness” that correlates with photosynthesis levels
on the ground. Such an approach is being tested by the International Livestock
Research Institute in Kenya to provide cover to nomadic herders (see Chapter 12).
A drawback of using this type of technology is that cloud cover can limit
satellites’ ability to capture clear ground-level images, thereby disrupting the
availability of continuous or regulator historical data (Hazell et al., 2010).
24.5 The promise of mobile phones
The use of mobile phones in the various microinsurance models clearly illustrates
the powerful potential of this widespread technology. For instance, in 2011 close
to 57 per cent of Africa’s adult population had mobile phones, ranging from a
high of 84 per cent in South Africa to a low of 21 per cent in Mali (Gallup, 2011).
Mobile phones make product purchases possible, permit premium payment
through airtime deductions or via a mobile wallet, and facilitate claims assessment
and payment.
Another critical feature for microinsurance is that mobile phones permit
immediate communication throughout the value chain, cost-effectively bolstering
the confidence of a sceptical market. Mobile technology provides the opportunity
to communicate and collect data from clients. Through SMS and voice
messages, insurance companies and their distribution partners can confirm to
clients whether enrolment has been completed and their policy initiated, communicate
information such as the need to have sufficient funds in their bank
account available for the next premium payment, and advise whether a claim has
been received and is being processed.
Both text messaging and voice communication are immediate forms of communication,
permitting real-time responses from the insurers. In the case of the
Max Vijay in India (see Chapter 8), clients were willing to trust confirmation of
payment received via text message as much as a printed cash receipt from the
merchant where they made their premium top-up. This helps to avoid fraud and,
over time, builds trust in electronic communication as a replacement for paperbased
and other communication methods.
Going forward, mobile technology may ultimately become more prominent
in supporting the collection, validation and packaging of microinsurance
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