The Landscape of Microinsurance 2019

Alice MerryFinancial Inclusion Consultant2nd November 2020

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• 199 questionnaires submitted in 27 countries

• USD 1,060 million in microinsurance premiums

• 5% of estimated potential market captured

• 162 to 253 million people covered

• Represents 6% to 10% of low- and middle-income population in these countries

Headlines

TREND ONE:THE CONTINUED RISE OF LOW-COST HEALTH PRODUCTS

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Microinsurance products across the three regions

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• Product offered by telecommunications company Telenor in Bangladesh

• Combines digital health advice, a teledoctor service, healthcare discounts and hospital cash insurance

• Offers free and paid packages

• By 2018 had reached 750,000 paid customers in Bangladesh.

Tonic: Hospital cash insurance in Bangladesh

TREND TWO:SHIFTING PERSPECTIVES ONCLIMATE RISKS

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Climate risksImportance of government support

• The Prime Minister’s Crop Insurance Scheme in India covered 18.7 million farmers in one season in 2019

• Similar scheme in Indonesia covered close to a million hectares of paddy fields by 2016

Claims building trust in West Africa

• AXA partnered with the Compagnie Nationale d’Assurance Agricole du Sénégal (CNAAS) and the West African Development Bank (BOAD) to launch an index insurance product in Senegal

• Protects cotton farmers against damage caused by drought

• Premiums subsidized at 50% by the Senegalese government

• High claims ratios as a result of recent drought seen as important in establishing trust and understanding of the product. Now reaches almost 30,000 cotton farmers.

TREND THREE:COMBINING DIGITALISATION AND HUMAN TOUCH

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Continued importance of agents

Increasing reintroduction of human touch and creation of hybrid models

• MicroEnsure collaborated with GCashin the Philippines to offer life, personal accident and hospital cash insurance

• Hybrid model: possible for customers to sign up through an entirely digital process, but most brought on board through active sales to leads identified through data provided by GCash

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“Virtual spaces that allow for direct interactions between consumers and providers of goods and services, e.g. ride-hailing platforms, delivery platforms,

e-commerce and freelancer platforms”

Digital platforms

Financial services form an important part of many platforms’ long-term business models

• Grab is a ridesharing platform popular in Southeast Asia

• Quickly begun offering money transfers

• Now offers insurance on a per-journey basis as well as travel insurance

TREND FOUR:CONCERNS AROUND CUSTOMERVALUE

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• Median claims ratios across the three of 23%

• A third of products in all regions, and half of products in Latin America and the Caribbean, have claims ratios in single digits

Concerns around claims

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• For the first time, this year’s Microinsurance Landscape study has collected data on the gender of microinsurance customers

• Insurance providers were able to provide this information for 45% of products in the study

Reaching women clients

WHAT ABOUT COVID-19?

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1. Increased awareness of a range of risks

2. Reductions in new sales and renewals

3. Uncertain impact on claims

4. An increased focus on the need for business interruption insurance

5. Accelerating digitalisation

6. Perceptions of insurers not supporting customers through the crisis

7. Uncertain long-term impact on the microinsurance business case

Early reported impacts ofthe COVID-19 pandemic