Opportunity’s MicroEnsure, the world’s first microinsurance intermediary, provides protection against the many risks faced by those living in poverty. Today, more than 3.2 million clients can fall back on our crop, loan, health, life and property insurance products in times of hardship or disaster.
Who’d have thought that getting up at 8 a.m. on a Saturday morning to listen to someone speak about microinsurance would have been so interesting? In this session, Richard Leftley talked about how providing insurance for those living in poverty has created an impact on individuals and has proven to be a powerful safety net.
Leftley has worked with Opportunity International for the last 10 years on getting insurance into poverty stricken areas. He started thinking of ways to provide insurance products while working in Zambia. A woman approached him and explained that she was frustrated because he didn’t understand her life. “My life is like this Chutes & Ladders board [game],” Leftley narrated. “The loans Opportunity gives me are like ladders, they give me growth. But where are you when disaster strikes? When someone in my family dies?” This is when Leftley understood that his role was to provide this community with a safety net.
For microinsurance to work, there are three key roles that need to be performed: Risk Carrier, Front Office, and Back Office. MicroEnsure works primarily in the Back Office, designing products and processes, training sales staff and clients, collecting/storing/reporting data, and handling administrative duties. “Paying claims quickly is the most important thing for the poor,” and MicroEnsure works to create the structure that makes this possible.
One of the innovative ways that they are now selling insurance products is through mobile phone companies. There are two main approaches they have taken in Africa. MicroEnsure’s partnership with Tigo has been their most successful one. In Africa, mobile phones are all prepaid. Tigo introduced insurance as part of a loyalty program: the more money you spend on your phone, the more credits you get for insurance. Users would receive a text message saying: “Thank you for using Tigo. Based on your Tigo usage in December, your free life insurance is XXX credits for January. Use more Tigo, get more insurance!” With this program, they have been able to double their clients.
The other way that they have been selling insurance is by putting an insurance menu directly on the mobile phone. The menu is simple, easy to use, and allows individuals to buy different levels of coverage for themselves and members of their family, and the payment comes right out of their mobile phone credit.
MicroEnsure’s products include coverage for life, property, weather, livestock, and health. They search for trusted sources such as churches, microfinance providers, and recognized brands to introduce the idea and benefits of insurance to potential customers. Their simple product and process design has created cost-effective access to risk protection for communities living in poverty.
This post was written by Barbie Lucio. Barbie is a member of the San Francisco chapter of YAO and works with philanthropists to create change and impact.