In last month’s newsletter, we shared some of the details from the first day of the MiN’s June Member Meeting which took place in Luxembourg. As Paul Weber, a diplomat at the Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade, responsible for Luxembourg's Development Cooperation in inclusive and innovative finance and MiN’s Board member, highlighted in his opening remarks, the country is dedicated to advancing inclusive finance globally. The House of Microfinance, for example, serves as a collaborative ecosystem for advancing inclusive insurance and the country allocates 1% of its gross national income to Official Development Assistance. For Weber, this highlights how important microinsurance is in addressing global challenges and helping vulnerable populations develop resilience to climate change.
But it can only provide a solution if the people who need it most trust those who provide it. To achieve this, the industry needs to develop products that are tailored to the needs of these customers, and to pay out claims in a timely manner. It also requires the whole insurance ecosystem to collaborate to ensure they can develop sustainable solutions – both in the products themselves and how they’re distributed – that benefit the industry and the end-users. And this theme was touched on throughout Day 2, along with the challenges the sector faces, particularly around data collection, and some of the ways these problems can be overcome.
Addressing the challenges of data collection
Day 2 of the programme started with a discussion around data collection and the challenge of getting access to certain types of information. Laura Rosado, Head of Strategy and Performance Management at AXA Emerging Customers (and Vice Chair of MiN’s Board of Directors), highlighted the importance of consistently collecting data and making it easier to access, which is one of the key reasons why MiN conducts the Landscape survey every year. Typically, data about the insurance industry in each country is collected by local regulators and supervisors, but the lack of consistency makes it difficult to compare to other countries and markets. The annual Landscape survey is currently the only way to access data from other regions. And this data is essential in helping countries to understand their local market within a global context and set benchmarks for the industry.
While there is a lot of support for the Landscape study – in 2023, there was record participation from donors – there are still several challenges around collecting social and operational indicators, such as sex-disaggregated data, claims turnaround times and rejection ratios (crucial for assessing customer service). As a result, improving data collection and closing the data availability gap are key priorities for MiN in 2024, along with increasing insurance participation in each market.
The challenge of obtaining sex-disaggregated data has been a concern for a while. As a result, Access to Insurance Initiative (a2ii) has been working as part of the IAIS Market Conduct Working Group to provide additional recommendations and guidance to regulators around introducing insurance that supports minorities, vulnerable populations and underserved groups. This has led them to develop FeMa Meter – a simple Excel-based tool that helps to identify inequalities across major risks for specific needs of different groups, especially women. Milena Kozomara, an advisor at a2ii, explained that it collects 13 key indicators around market access and usage, as well as governance or organisational diversity. With these, companies and regulators can get automated calculations and graphs, and aggregate and compile data easily. So far, the tool has been piloted in Argentina, Lesotho, Zambia and Pakistan and, since its launch on the 8th of March, is now available for wider use.
The FeMa Meter success story served as an example of identifying best practices applicable to the Landscape project, which we later discussed in groups as we focused on strategies, solutions, opportunities and challenges to improve the impact of the Landscape study. Our members shared their insights that will be valuable in shaping the future studies. The 2023 edition is available for download in English, French, Spanish and Arabic here.
Partnerships are key to increasing insurance uptake
To ensure key population groups are included when collecting and analysing data, collaboration will be needed across the industry. This was a hot topic during the second session of Day 2, moderated by Rishi Raithatha, Director at Vark Consulting. Here, Elias Omondi, Principal, Innovation for Resilience of the International Actuarial Association (IAA) shared the three-pronged approach they’re taking to developing an ecosystem that will support the future of insurance in Africa: connecting the ecosystem by attracting, inspiring, and coordinating key players within the financial and technology industries; creating new products and solutions by fostering collaboration within the industry; and scaling the industry through venture building. To do this, they place innovators at the centre of the ecosystem and bring others (including tech players, investors, insurers, and regulators) in to support. The IAA also funds startups.
They are currently active in 16 countries across Africa and have accelerated 75 startups and 60 innovative solutions reaching 3.5m customers across their four focus areas: climate, SMEs, health and gender. Their key goal is to set up an innovation passport in Africa to make it easier for innovators to scale their products across different countries. To really succeed in Africa though, requires partnerships beyond traditional insurance companies, so thinking outside the box and finding new collaboration opportunities is essential.
During this session, other organisations shared how they’re using partnerships to further innovation in the sector. For example:
Building resilience in the agricultural sector
The following session, opened by Pranav Prashad, Senior Technical Officer at ILO's Social Finance and Impact Insurance Facility, explored some of the challenges that smallholder farmers face and how insurance can help tackle them. The idea of collaboration was also carried through this session as Andrea Camargo, Senior Insurance Specialist with the World Food Programme (WFP) explained how they partner with the private sector to foster market development, helping those who are most vulnerable to economic and environmental shocks build their own resilience tools.
She explained that the WFP’s mandate includes transformative development (not just humanitarian response) which has evolved over the years. In the early 2000’s this would take the form of asset creation - such as building irrigation systems - where beneficiaries earned insurance coverage through work. Now, the focus is on developing financial instruments that mobilise funding for risk reduction. For example, they are collaborating with financial sectors across different countries to get funding for solar-powered irrigation systems that can help long-term, sustainable agriculture. Since 2011, the WFP has been actively engaged in macro, meso, and microinsurance across 27 countries, mainly in Africa, benefiting approximately 5m people.
Annette Houtekamer, co-founder of the Global Insurtech IBISA explained how they are focused on tackling Climate Risks in emerging markets by comprehensively yet efficiently covering the risks faced by businesses and communities. Farmers play an integral role in global food supply, and the erratic conditions caused by climate change not only affect their livelihoods, but could have wide-ranging effects on food security worldwide. Ensuring farmers have stable incomes and access to healthcare is crucial to keep them productive and prevent economic stress. IBISA does this by providing tailored insurance products for farmers and platforms for continuous near real-time monitoring of heat, rain and wind to facilitate underwriting, claims processing and payouts. They develop these products using satellite data spanning 40 years to refine their risk assessment models so they can offer more precise solutions.
Our members later delved into group discussions that were instrumental in advancing the goals of the meeting and were facilitated by the Best Practise Group Smallholder Farmers. Participants worked to establish a shared understanding of the crucial role insurance plays in supporting smallholder farmers and enhancing their disaster resilience. They explored the challenges and potential solutions for implementing scalable and sustainable insurance schemes, while also emphasising the need for strong stakeholder collaboration and coordination. The discussions were guided by key questions, focusing on developing climate-resilient insurance products, the role of government and regulators, fostering public-private partnerships, leveraging digital innovations, encouraging continuous innovation within insurance companies, and increasing women's participation in insurance schemes. These dialogues provided valuable insights and actionable strategies to drive the future of inclusive insurance for smallholder farmers.
Collaboration as the path forward
Day 3 concluded with an interactive session focused on our Best Practice Groups, focused on thematic areas and closely aligned to the UN Sustainable Development Goals along with insurance business lines. We aimed to identify opportunities to increase the value and participation within these groups, with a focus on fostering more active engagement and delivering tangible outcomes that benefit the entire network.
As highlighted at the start of the June meeting, industry collaboration will be key to developing the microinsurance sector. There are already plenty of examples of successful partnerships between different parts of the insurance ecosystem – both private and public sector players - and it’s encouraging to hear plans for further collaboration as programmes expand across regions. The use of technology to help scale this growth was also highlighted, with many initiatives using it to help design new products and methods to distribute them. We are excited to see how these progress over the next 12 months.
Once again, we’d like to thank everyone who attended this year’s member’s meeting, and in particular, those who contributed to the discussions on Day 2: Laura Rosado (AXA), Milena Kozomara (a2ii), Rishi Raithatha (Vark Consulting), Elias Omondi (IAA), Jaime de Piniés (Blue Marble), Solène Favre (Vision Fund), Ali Ahmed (EFU Life), Pranav Prashad (International Labour Organization) Andrea Camargo (WFP), Annette Houtekamer (IBISA), Nicolas Morales (MiN) and Sara Orozco (MiN).