The strong development of actors in mobile micro-insurance

In the past few years, we have noticed a rapid increase in the number of products of mobile micro-insurance launched worldwide. This growth is due to the willingness of different actors of microinsurance to grow by touching new markets at the base of the pyramid and accentuating technological innovation.

There are five different business models in mobile micro-insurance:

1. Insurers that target new segments, especially with low revenus, thanks to new products developped for the mass market.

2. Insurers that favor technology, especially relying on mobile payment means , but also for exemple bu using RFID tagging for livestock insurance.

3. The mobile network operators seeking passive loyalty by offering an insurance, generaly free of direct charge, to the clients.

4. The mobile network operators seeking active loyalty by providing an insurance coverage only to customers who meet the minimum objectives.

5. The mobile network operators seeking loyalty and direct revenue by offering insurance products as a value-added service to the clients.

In this growing sector, we note since last years, a change in countries where are deployed mobile microinsurance products . Indeed, the first mobile microinsurance products have been launched in intermediate revenue countries as South Africa, but since 2010, most of them have been deployed in low revenue countries, mainly in Sub-Saharan Africa (54%). 23% in South Asia, 20% in East Asia and in the Pacific.

This new expansion seems to become increasingly diverse in terms of models and impact, as well as the growth of service providers specialized in micro-insurance dedicated to companies.

With these new actors, we see the emergence of new products of portable microinsurance very technologic that deploy more quickly, thus increasing the global footprint of mobile microinsurance in the world.
However, such success begins to raise important questions about the risk associated with products as well as uncertainty about the future of customer relationship , specifically for low literacy clients who have little experience in mobile insurance products .

This recent progress also seems to be increasingly dominated by mobile network operators which are more active than insurers or banks in branding, marketing, relationship-role customer and loyalty.

Sources :
CGAP Blog, CGAP article

Tags : mobile microinsurance, mobile network operators, insurer, micro-insurance, mobile payment, MicroWorld, base of the pyramid