The Microinsurance Network (MiN) aims to build a world where everyone is resilient to daily risks and natural disasters. Insurance and risk management are fundamental to achieving this; however, for around 80% of the world’s population, access to such financial services is often very limited.
By providing MiN members with the critical knowledge that is needed to make insurance services work far more effectively for the poor, and by sharing the necessary resources to reach these often excluded consumers, as a community, we are – despite the many challenges – starting to close this protection gap.
This success is built on the work of our members, a recent example of which can be seen with Seguros Mundial, a Colombian-based insurance company which successfully deployed an inclusive insurance product to the rural communities of Colombia.
As experts in “traditional” personal insurance, stepping into the realms of inclusive insurance was a new challenge for the Seguros Mundial team. The task was made even more daunting due to several ingrained beliefs shared by the local residents, including the notion that buying insurance encourages misfortune and that insurers don’t pay out following a claim. In other instances, people also believed themselves to be immune to risks. Of course, the idea that “it can’t happen to me” is not specific to rural consumers in Colombia …
The scale of the situation was reported in the 2018 Insurance Demand Study by Banca de las Oportunidades, Fasecolda and the Financial Superintendence, which revealed a low percentage of Colombians had voluntary insurance.
The findings encouraged Seguros Mundial to pitch an idea to develop and distribute a low-cost, easy-to-access product aimed at these vulnerable and rural households. The proposal was accepted, and having secured funding from the Más Seguro, Más Futuro (More Insurance, More Future) programme, the team moved onto the next step: research.
First impressions
Even with nearly 50 years’ experience in the “traditional” personal insurance sector, the Seguros Mundial team were breaking new ground when it came to inclusive insurance, so field visits to these communities were essential to better understand the needs and culture of their would-be policyholders.
During these visits, it was apparent that the people interviewed did not believe that traditional method of single-risk insurance covering just accidental death would be of much benefit to them. Interviewees felt that the perceived value of insurance and customer satisfaction are compromised when policies do not result in claims payouts. So, to make the benefits of insurance more tangible, the company developed a product that would cover risks that were likely to materialise during the life of the policy, triggering claims payouts. Seguros Mundial also realised how much the family’s welfare was of concern to clients, since an adverse event would impact not only the insured person, but also their household. Consequently, the product was designed with this in mind.
The field research prompted Seguros Mundial to offer a modular product, where the insured could tailor coverage to meet specific needs. Elements, such as the name and product visuals, were also carefully chosen to make Seguros Mundial seem approachable and trustworthy. “Segurísimo”, which means “Very safe” was chosen as the product name, while the product’s character was designed to incorporate elements of Colombian culture, among them the traditional ruana poncho and the vueltiao hat. “Segurísimo is an insurance product that is born of the voice of the customer,” as said by Angela Susana Pinillos Suarez, Human Resources and Strategic Innovation Manager at Seguros Mundiales.
Business partnerships were also used to build trust between the insurer and consumers, the most notable being the alliance with the National Federation of Coffee Growers of Colombia, which would bring coverage to coffee farmers.
Managing expectations
To ensure the cover was affordable, the cost of the modular policy is, on average, 24,000 Colombian pesos (USD 5.98) every six months, and covers several risks selected by clients during product enrolment. Cover can include accidental death, mutilation or dismemberment, floods, hospitalisation, disability, or aid for medical expenses due to stings, fractures, burns or poisonous animal bites.
Another innovative aspect of the modular product is the claims payment method. Following a successful claim, the policyholder receives monthly payments – ensuring them guaranteed, long-term support.
And the innovations don’t stop there. To reach an ever-wider audience and to combat the challenges raised by the pandemic, Seguros Mundial is in the process of developing a mobile app, which will make taking out insurance and receiving claims payouts easier for policyholders. Customers can also pay premiums through their utility bills, making the whole process easier and more accessible for all.
Positive outcomes
Seguros Mundial has been so successful in reaching rural populations with its Segurísimo product that attention is broadening in urban populations too, especially for those on lower incomes. Consequently, as of 31 December 2021, a total of 4,388 policies had been issued to people who acquire the product for the first time, and 3,071 policies had been issued to those on low incomes.
It would seem that by interacting with and understanding the customer, the Seguros Mundial team has been able to create a product that is not only tangible to its clients, but offers collective value too – elements which are vital in closing the protection gap. In the view of Angela Susana Pinillos Suarez, it is “an insurance that embodies the values of the company by thinking not only about the wellbeing of the purchaser but also of his or her primary family unit.”
To download the case brief “Segurísimo: Developing inclusive insurance in Colombia”, please click here.