BIMA uses mobile technology to disrupt the global insurance and health industries and fuel inclusion. We spoke to Mathilda Ström, Deputy CEO and member of the MiN Board about challenges in regulation, the importance of customer education and the insurance gender gap, among other hot topics.
MiN: How has BIMA got to where it is today?
Mathilda: We launched in Ghana in 2010, initially providing affordable insurance products to underserved consumers and later expanding into mobile health services in 2015. We have since replicated this successful model across multiple developing markets, reaching more than 36 million customers since we started and we’re continuing to see rapid growth. We focus on bringing all customers an end-to-end healthcare service, including preventative health advice, doctor services, easy access and payment for medicines and tests as well as hospital and life cover. We aim to drive inclusion at every level of a person’s health journey.
MiN: How is BIMA helping to scale up inclusive insurance penetration?
Mathilda: We’re really proud of our work in increasing access to health and insurance services for low-income customers on such an unprecedented scale. 93% of our customers live on less than US$10 a day and 75% of them can now access insurance for the first time.
In our flagship market Ghana, for example, insurance penetration was just 8% in 2010 rising to 30% by 2018. There’s still a way to go, but companies like BIMA are leading the way in education and awareness about the need for insurance amongst underserved communities.
MiN: What are the main challenges and opportunities for microinsurance in your markets?
Mathilda: The challenges include finding alternative and efficient digital payment channels, the regulatory framework and low insurance awareness, combined with a lack of trust in financial services.
Regulation poses a considerable challenge - existing legal and regulatory frameworks might not be in line with the microinsurance sector’s requirements and demands in emerging markets. In particular, microinsurance sold via digital channels is an entirely new concept to regulators who have been used to regulating insurance, financial services, telecommunications and health services in separate silos. Regulators need to work together to understand how they can incorporate digital technologies into their frameworks.
Customer education remains another key challenge. Most consumers in developing countries are experiencing insurance for the first time and many mistrust financial services. If their first experience with insurance is negative - for instance if the company doesn’t pay a claim or goes bust - this can be a huge setback for our efforts to create trust.
MiN: What is the business case for microinsurance?
Mathilda: At BIMA we no longer refer to ourselves as a microinsurance company - from a customer perspective, ‘micro’ doesn’t make sense. They just want an insurance product. Traditional insurers currently ignore huge swathes of the population because they tend to target higher income customers. They also lack the right infrastructure to engage and service lower income people effectively and profitably. Microinsurance targets both low-income customers and middle-income individuals looking for affordable insurance.
However, larger insurance companies looking to expand in emerging markets could be hindered by their size and by traditional ways of working. That’s where InsurTech can make a difference - it can improve everything from back-end efficiencies to customer-related innovations. It can find new ways to optimise and create opportunities in the customer journey. InsurTech still has to work within regulatory frameworks - but within that context it can certainly offer value.
MiN: Is there still a gender gap in insurance?
Mathilda: Yes! Nearly one in three women have no access to the formal financial system, they are chronically underserved, and along with their children they are usually most affected by crises like death and illness. Lower levels of literacy and dependency on men for money mean that they are particularly vulnerable to financial shocks. By helping women get access to basic financial services, we give them financial protection and help bridge the financial inclusion gender gap.
MiN: Why is BIMA a member of the MiN?
Mathilda: As a founding member of BIMA I played a key role in building a global business, and as a member of the MiN Board since 2017, I’ve been able to provide the Network with insights into technology, regulation and operational excellence in the mobile insurance space. BIMA joining the MiN also signified the growing importance of digital platforms as distribution channels for insurance in emerging markets. The Network engages with regulators and BIMA sees real value in that - by coming together and addressing our challenges collectively we can focus on resolutions.
Collaborating on industry challenges and solving complex problems together is exciting. Since we joined the MiN, we’ve seen an increase in member engagement - the strength of the Network lies in the convening of different players and the communication between them, highlighting the challenges faced and working together to solve them. For example, BIMA has presented its business model and shared its successes and challenges with MiN members at several conferences and events. These shared experiences help the industry grow, which I’m very proud of.
I’m also proud of the relationships that the Network has helped foster with regulators. In Ghana, the regulators have seen considerable growth in insurance penetration, and we’ve been able to make considerable advances in digital insurance - that was only possible through these relationships.
MiN: How do you see the MiN’s future?
Mathilda: The Network can and should continue to help foster an open dialogue with regulators. I see this as key. In five years, I’d like to see the MiN as the go-to source for microinsurance developments and for the Network to invite even more new commercial players to join our community and participate in these conversations. There are new smaller, up-and-coming tech players who would offer a new perspective to the Network and some more established players.