Inclusive insurance for improved health and well-being

Low-income individuals and families in emerging economies are more likely to be malnourished, live in an unhealthy environment, be more exposed to contaminated water supplies, have restricted access to healthcare, take fewer preventative health measures, and are disproportionately at risk from accidents and illness which can push them back into extreme poverty. Women are particularly exposed to reproductive health risks. According to the World Health Organization (WHO), about 150 million people around the world suffer financial catastrophe from out-of-pocket healthcare costs each year.

Inclusive health insurance is a vital add-on to basic state social and health protection. But insurance doesn’t just help manage health risks - it encourages people to seek medical help when they need it and boosts well-being by providing peace of mind even when life is smooth.

Many MiN members are helping to achieve SDG 3 (Good health and well-being) and SDG 5 (Gender equality) by providing inclusive health and life insurance. In Pakistan, for example, Kashf Foundation pioneered health insurance for low-income households and currently enjoys around 30 percent market share, with more than 400,000 clients and 1.5m lives covered. Women make seven percent of claims and receive 72 percent of the total claim amount. “Our research showed that any household money for hospitals or medicine was being spent on men and children,” says Kashf’s CFO Shahzad Iqbal. “The women were really missing out and were suffering as a result.”

Payments for out-of-pocket expenses may be one of the biggest incentives for taking out cover. For example, as Lead Foundation found when designing their new health product for Egypt, more than half the population has access to government health insurance, yet 72% of total health expenses are out-of-pocket - transport, medicine, special diets, hospital stays, loss of income - and even bribes.

As Jon Hellin and Dr. Eleanor Fisher wrote in the State of Microinsurance 2018, “Women represent an untapped target group for insurance with high growth potential. There is a social and business case for factoring gender into the design and implementation of inclusive insurance.”

“Low income women don’t talk about being uninsured,” says Gilles Renouil of Women’s World Banking (WWB) - also a MiN member. “Health, education, income and - depending on the region - food security are their main financial pain points, but you always find health in the top three.”

There’s a solid business case for low-cost health insurance, according to the ILO’s Impact Insurance Facility. Their recent report Financial Inclusion and Health: how the financial services industry is responding to health risks finds there is a huge, as yet unmet demand for health solutions to keep clients and their families healthy. However, the market is not without its risks. Some clients might be tempted to make over-enthusiastic use of benefits such as cash payments for overnight hospital stays. “As soon as the women realised they could claim on the insurance they started using it for themselves,” says Kashf’s Shahzad Iqbal. “There was a 155 percent loss ratio in the first year!”

Health insurance could be a good way to build clients’ trust, provided they have a good experience. Having to pay an up-front premium, delays in settling claims and complicated claims paperwork are among the reasons why some products are unsuccessful. As always, listening to customer feedback is key. The ILO lists some top tips for successful health microinsurance, among them making it mandatory, designing simple products, offering value-added services and bundling health insurance with savings products.

Additional value can be added by bundling in extra health services such as telemedicine or reward-based schemes which incentivise healthier behaviour and lifestyles - for example the globally successful Vitality programme from Discovery Health, which rewards users for healthy activities such as going to the gym. Reward schemes currently target mainly middle-class clients in relatively wealthy countries, but as the ILO’s Lisa Morgan argues, there is nothing to stop them being applied to microinsurance markets. Triggerise, for example, is a not-for-profit development organisation operating in Sub-Saharan Africa and India which has developed a number of low-cost reward platforms to drive healthier outcomes and social impact. 

However, as long-standing MiN member Denis Garand puts it, “The whole field of health coverage really has a long way to go - we are really only starting to understand a more holistic approach and making quality and efficiency improvements to improve the outcomes of people’s lives.”

“For low-income households to avert poverty,” says the ILO, “they need family members who are healthy enough, for long enough, to be sufficiently economically active to accumulate wealth and thus become financially resilient.”