Protecting the Poor: A Microinsurance Compendium
Mobile phones and microinsurance
Making use of mobile phones can drive the expansion of insurance coverage in low-income markets. It should increase the efficiency of transactions across the entire value chain, improving processes such as enrolment, premium collection, and claims settlement. At first glance, the incentives that drive revenues for mobile network operators (MNOs) and insurers do not seem naturally aligned. MNOs have more customers and more products than insurers and they have fewer difficulties in serving the low-income market. But it is precisely these distinctions that make MNOs such attractive partners for insurers wanting to reach scale and to access the low-income market. MNOs can provide insurers with access to a large, dispersed client base and an established network of distribution points to interact with these clients. It can enable exceptional scale and it can, although not always, improve client value. On the other hand insurance can help MNOs to raise revenues and create adjacent benefits such as reducing churn and increasing average revenue per user (ARPU).