FinMark Trust commissioned Bankable Frontier Associates (BFA) and Cenfri to learn lessons from the EcoLife m-insurance case and develop recommendations with the aim of protecting clients and ensuring positive synergies between financial inclusion and these other policy objectives in the m-insurance space. M-insurance offers significant potential to increase access to insurance for the under and unserved populations and supervisors should be encouraged to find ways to support these models. However, unlike traditional micro- credit which takes a long time to grow, the potential for scale can create systemic risk and therefore more focus should be placed on setting rules up front and closely observing the initiatives. So, whilst the dictum "do not rush to regulate" has important lessons for supervisors in a nascent market, there is also a need to set rules ex ante to ensure that one ensures a positive synergy between financial inclusion and a stable and well-functioning insurance sector. In line with the principle of proportionality, there is a need for a more stringent 'test and learn' approach than would typically be the case for initiatives that do not pose the same systemic risk.
- Please click here to download the complete study on Regulating m-insurance in Zimbabwe: managing risk while facilitating innovation (PDF, 1.2MB)
- Please click here to view the presentation at the 9th International Microinsurance Conference in Jakarta (PDF, 0.9MB)
- Please click here to read the CGAP blog by Jeremy Leach, Director, Bankable Frontiers Associates, on M-insurance: Ensuring take-off while doing no harm
This case study and recommendations are only the start of a learning process of how to manage these fast growing schemes. We welcome the opportunity to build off this paper and develop a clearer view on how to ensure synergy between financial inclusion and a stable protected inclusive insurance market.