Need to find a partner: go virtual
Insurers are starting to use a new type of network infrastructure to distribute microinsurance products. Until recently, insurers primarily partnered with distribution channels that provided a physical network.
Advancements in technology, particularly mobile technology, now provide access to virtual networks. Partners with virtual networks are attractive as they provide access to a concentration of clients (including unbanked and informal workers) at low costs, a financial transactions platform, and substantial brand power. An example of this exciting opportunity was illustrated in the recent webinar on “New Frontiers in Microinsurance Distribution”.
MicroEnsure in Ghana recently launched mobile insurance life products in partnership with two mobile operators (MTN and Tigo) that control 80 per cent of the Ghanaian mobile market. The products are designed so that they drive the core business of the partners. For the MTN product, clients can complete enrolment, premium payment, policy management and claims through the mobile handset. The premium is automatically deducted from the client’s Mobile Money wallet. The Tigo product provides cover based on clients’ airtime use. Though the product is free, clients must opt-in to the policy at a Tigo office. Each month clients receive a SMS message that details how much cover they have earned based on their airtime use.
Through these products, MicroEnsure expects to double the number of Ghanaians insured (excluding government-based health insurance) in one year.
Such networks exist in other countries, and provide exciting opportunities for microinsurance. To learn more about distribution opportunities, Microensure and other organisations, view the video and slides from the webinar.