The following news announcement appeared on MicroEnsure’s website on Friday, June 17.
MicroEnsure has won the FT/IFC Sustainable Finance Award in the category Achievement in Financing at the Base of the Pyramid. The awards, organized by the Financial Times and the International Finance Corporation, a member of the World Bank Group, were announced on Thursday, June 16 at a dinner in London attended by more than 250 senior decision-makers in finance and sustainability.
The FT/IFC Sustainable Finance Awards, the major global awards for environmentally and socially responsible banking and investment, evolved out of the FT Sustainable Banking Awards, which over five years have established themselves as the world’s leading awards for banks and other institutions focused on sustainable development. The 2011 Awards attracted a record 187 entries from 161 institutions in 61 countries.
MicroEnsure’s submission was based on its pioneering work providing life insurance products with two leading Ghanaian mobile phone providers. Growing rapidly, MicroEnsure’s products are expected to double the number of Ghanaians served by insurance by the end of 2011.
Because less than 2% of Ghanaians have a life insurance policy, families typically sell assets, use savings, and rely on donations and loans to finance funerals. When a family is not able to cover its expenses, the women and children are often the first to be affected; children are removed from school and the women and children forego proper nutrition and healthcare, leading towards a downward spiral into poverty.
With the rapid growth of mobile financial services, MicroEnsure has identified a significant opportunity to meet the demand for insurance among the poor. The first model is tied to mobile payment platforms where the subscriber chooses to buy insurance and pays small premiums each month on an automatic, recurring basis. The second model is a frequent-user model, where the subscriber is rewarded with increasing levels of life insurance based on the amount of airtime used over the course of a given month. The mobile network operator is willing to pay the premium, as they profit from increased usage. Part of MicroEnsure’s motivation for this model is to get millions of people to have a first experience of insurance through a simple, low-cost policy. Once customers have a positive first experience with insurance, they will be more likely to increase their reliance on insurance in general, in order to protect themselves from risk.
Martin Fuller, Chief Operating Officer of MicroEnsure, commented; “It gives me great pleasure for MicroEnsure to have won another FT/IFC Sustainable Banking Award this year. Three years ago we won our category, last year we were runner up (to deserving winner FINO) and this year our pioneering work with the mobile network operators has been picked out for praise.”
2011 FT/IFC Sustainable Finance Awards: “Achievement in Financing at Base of the Pyramid”