Microinsurance providers partnering with virtual networks for distribution
Microfinance Focus, July 28, 2011: According to the latest findings from the Emerging Insight series of the ILO’s Microinsurance Innovation Facility, Micro insurers are now partnering with virtual networks for distribution of their microinsurance products.
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.
During its recent webinar “New Frontiers in Microinsurance Distribution”, Microinsurance Innovation Facility illustrated how MicroEnsure in Ghana which recently launched mobile insurance life products in partnership with two mobile operators, MTN and Tigo is benefitting from this opportunity. The operators control 80 per cent of the Ghanaian mobile market.
These 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.
With such networks existing in other countries as well, Microinsurance Innovation Facility believes that they can provide exciting opportunities for microinsurance.
