Scale: Thinking big

Achieving scale is a significant success factor for microinsurance schemes, as low premiums with high costs require substantial volumes to make an initiative sustainable; however to achieve scale is difficult. In an effort to identify lessons that support practitioners, the ILO’s Microinsurance Innovation Facility commissioned Cenfri to review microinsurance initiatives that have achieved scale  to identify and understand their trends and drivers in scale.

 

Scale: Thinking big (Microinsurance Paper #30) analysed 95 Initiatives that achieved scale and evaluated 8 case studies in detail to understand what drives scale. The study revealed that most initiatives that achieved scale in microinsurance did not build up to scale over time. Rather they sought out and maintained access to large target groups either through mandatory sales, partnerships (including access to voluntary groups, branding and product design) as well as agency.

The following are the emerging trends observed in achieving scale:

  • The majority of schemes (72%) offered at least one voluntary product with only 28% of schemes limiting clients to only compulsory products.
  • 66% of microinsurance is distributed through some form of third party aggregator (banks, MFIs, pre-existing groups such as labour unions, retailers, MNOs, post offices, credit providers or utility companies).
  • 34% cent of microinsurance is distributed through the state.
  • The largest proportion (53%) of microinsurance initiatives to have achieved scale exists in Asia. 
  • India and China have the vast majority of state subsidised initiatives and contribute to the number of health insurance schemes that have achieved scale.
  • The unsubsidised schemes, which account for 50% of all schemes, largely sold life products (including credit life and funeral products).
  • Very few agricultural schemes have achieved scale. 

The following are the emerging lessons from the study:

  • Insurers should align their scale strategy with their target group.  
  • Partnership is a cornerstone of scale, but incentives should be aligned.
  • Mandatory products offer instant scale and can be leveraged to offer other products.
  • Government has an important role to play in achieving scale for health and agricultural products.
  • Appropriate technology is essential for administration, information and communication at scale.
  • Tailoring products and processes to meet client needs increases uptake and retention.  
  • Agency is expensive, but offers substantial benefits if distribution networks are leveraged. 

Please click here to download the the complete report (PDF, 1.0MB)

Please click here to download the eight in depth case studies (PDF, 0.9MB)

Please click here to view the presentation at the 9th International Microinsurance Conference in Jakarta (PDF, 0.8MB)

Additional Info

  • Country: Cameroon
  • Institution: ILO
  • Date Published: 2013
  • Document Type: Research Papers
  • Author/s: Jeremy Gray, Mia Thom, Zani Muller

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Scale: Thinking big

Achieving scale is a significant success factor for microinsurance schemes, as low premiums with high costs require substantial volumes to make an initiative sustainable; however to achieve scale is difficult. In an effort to identify lessons that support practitioners, the ILO’s Microinsurance Innovation Facility commissioned Cenfri to review microinsurance initiatives that have achieved scale  to identify and understand their trends and drivers in scale.

 

Scale: Thinking big (Microinsurance Paper #30) analysed 95 Initiatives that achieved scale and evaluated 8 case studies in detail to understand what drives scale. The study revealed that most initiatives that achieved scale in microinsurance did not build up to scale over time. Rather they sought out and maintained access to large target groups either through mandatory sales, partnerships (including access to voluntary groups, branding and product design) as well as agency.

The following are the emerging trends observed in achieving scale:

  • The majority of schemes (72%) offered at least one voluntary product with only 28% of schemes limiting clients to only compulsory products.
  • 66% of microinsurance is distributed through some form of third party aggregator (banks, MFIs, pre-existing groups such as labour unions, retailers, MNOs, post offices, credit providers or utility companies).
  • 34% cent of microinsurance is distributed through the state.
  • The largest proportion (53%) of microinsurance initiatives to have achieved scale exists in Asia. 
  • India and China have the vast majority of state subsidised initiatives and contribute to the number of health insurance schemes that have achieved scale.
  • The unsubsidised schemes, which account for 50% of all schemes, largely sold life products (including credit life and funeral products).
  • Very few agricultural schemes have achieved scale. 

The following are the emerging lessons from the study:

  • Insurers should align their scale strategy with their target group.  
  • Partnership is a cornerstone of scale, but incentives should be aligned.
  • Mandatory products offer instant scale and can be leveraged to offer other products.
  • Government has an important role to play in achieving scale for health and agricultural products.
  • Appropriate technology is essential for administration, information and communication at scale.
  • Tailoring products and processes to meet client needs increases uptake and retention.  
  • Agency is expensive, but offers substantial benefits if distribution networks are leveraged. 

Please click here to download the the complete report (PDF, 1.0MB)

Please click here to download the eight in depth case studies (PDF, 0.9MB)

Please click here to view the presentation at the 9th International Microinsurance Conference in Jakarta (PDF, 0.8MB)

Additional Info

  • Country: Cameroon
  • Institution: ILO
  • Date Published: 2013
  • Document Type: Research Papers
  • Author/s: Jeremy Gray, Mia Thom, Zani Muller

Search news, publications and events