New Channels to Get Insurance to the Poor
This paper discusses features of effective distribution channels in microinsurance. It identifies factors essential for a successful distribution partnership in the sector.
The paper states that microinsurance needs scale and efficiency to be sustainable. Insurers often lack clarity about serving low-income clients and accessing poor markets. Involving a distribution partner can help create a successful business model. Insurers should ensure that the distribution partner:
- Provides access to a large number of poor clients;
- Engages clients in regular financial transactions;
- Creates and leverages meaningful relationships with clients;
- Supports sale and delivery of insurance;
- Provides suitable incentives for the partner.
The paper provides examples of successful distribution partnerships from India, Philippines, South Africa and Colombia. The paper states that insurers should consider the cultural, regulatory and environmental context and unique challenges involved in every partnership.