Inclusive insurance is reaching an increasing number of low-income communities. But these numbers pale in comparison against the billions of people who could benefit from insurance but who still lack cover - the so-called ‘missing middle’. These people - with incomes of between two and ten dollars a day - are often those who need insurance the most but are least likely to have it.
As MiN ED Katharine Pulvermacher puts it, “The good news is that there’s been a significant increase in the last decade in the number of low-income people with insurance cover of some kind. But for the market to work, insurers need a better understanding of the emerging consumer segment, so that they can design products and services that correspond more closely to customer needs.”
One way to overcome the poor uptake of inclusive insurance in developing markets is to make sure customers - and especially women - are at the heart of product design, testing and distribution. As participants at this year’s JMM learned, design thinking puts people at the centre and is always trying to understand the users, developing empathy and understanding of their needs and behaviours.
The need for customer-centric and gender-sensitive offers was underlined during the recent Expert Forum Inclusive Insurance for the Vulnerable. Daryl Collins, author of Portfolios of the Poor, said providing microinsurance is probably the most difficult financial service to get right, particularly when it comes to health products for women. “Women don’t know how long their health issue might go on for and what impact it will have on their lives,” says Collins. “Most women on the lower income spectrum are in the vulnerable space, because women will often forego medical diagnoses or treatment and prioritise others in the household, especially children.
Quentin Gisserot from AXA’s Emerging Customers project says inclusive insurance is about much more than adaption. “We have to think beyond miniaturising conventional insurance. We must reinvent rather than adapt existing products, with an emphasis on affordable, accessible and aspirational.”
MiN members Pioneer and MicroEnsure are long-time champions of a customer-centric approach to product development. Both Pioneer CEO Lorenzo Chan and MicroEnsure CEO Richard Leftley will speak during a plenary session at next week’s International Conference on Inclusive Insurance (ICII) in Dhaka, Bangladesh, facilitated by Bert Opdebeeck of Microinsurance Master - another member championing customer-centric inclusive insurance. The speakers will be invited to explore the challenges of distributing products to low-income and vulnerable populations.
“We exist as a business because of the customer. They are our reason for being,” says Chan. “In the insurance field we are still very traditionalist - it’s still a product that’s being pushed, that’s being sold and not being bought. So we’re hoping to change that by putting the customer in the middle. Customer centricity is ultimately the only thing that matters.”
Long-time MiN member Peter Gross, formerly of MicroEnsure and now at AXA agrees. “Insurance is often the worst customer experience that you might have, so insurance and customer-centricity seem to be mutually exclusive. The interesting thing is that when started asking customers what mattered to them, how they wanted to interact with the product or service, we really uncovered a new way to do insurance and have been able to disrupt the global insurance market. Our customers have built MicroEnsure. They build our products, our technology, our processes and our strategy.”
Chan’s message is compelling: “Yes, of course you have your numbers people, you have your process people, you have your IT people - but without customers where would they be? Nothing to process, nothing to charge, nothing to account for, so customer centricity must be at the heart of it all.”
Of course it’s not just health issues which hit women hardest - they are at the forefront of climate change, facing disproportionately high risks to their health, education, food security and livelihoods.On the recent International Day of Rural Women - with the theme Rural Women and Girls Building Climate Resistance, UN Secretary General António Guterres said that “listening to rural women and amplifying their voices is central to spreading knowledge about climate change and urging governments, businesses and community leaders to act.” Globally, according to the International Labour Organization (ILO) one in three women works in agriculture, yet according to Guterres, “they lack equal access to land, finances, equipment, markets and the power to make decisions.”
They are also more likely to be excluded from accessing formal financial systems. A second session at the 15th ICII, featuring among other speakers, Hannah Grant, the Head of A2ii’s Secretariat, will explore gender sensitive approaches to climate risk insurance and seek to identify solutions and concrete actions for greater gender-inclusiveness.
As Daryl Collins observed during the latest Expert Forum: “Inclusive insurance is a bloody hard business. It’s the hardest challenge within financial inclusion - yet the need is profound, especially in health. I see women dying or experiencing extreme disability and bringing their whole family down with them.”