Bundled and composite products

Bundling insurance products can refer to buying a combination of insurance products or coverage that offers a consumer the convenience and potentially cost savings of combining multiple coverages in one package (a composite product or “basket” coverage). In microinsurance, where customers tend not to hold multiple policies, it can be a tool for improving the convenience of the mechanisms for enrolment and payment of insurance premiums. However, regulatory barriers to these types of products are common..

Insurance products may be “bundled” with other financial and non-financial services as well. These products can tap into the efficiencies created by the lender or other service provider’s existing relationship with the client. The most common example is of mandatory borrower’s insurance, which can also benefit the lender by protecting its loan portfolio. Voluntary policies linked to loans or savings accounts are other examples of bundled products where payments and/or enrolment is linked to one transaction or “basket”.