The business of insurance is hard. Microinsurance delivery has proven to be nearly impossible. Despite almost two decades of focus on the under and uninsured, microinsurance reaches just under 300 million people across the developing world. This is only around 10% of the potential market for insurance. While promising examples have been documented of insurers achieving the impossible, sometimes even at scale, insurance cover for billions of excluded adults appears to be a long way down the road.

Digital technologies and business approaches are starting to change the nature of insurance delivery. These technologies, popularly known as ‘InsurTech’, promise to reach more individuals cost-effectively and in a way that delivers more customer value. But is technology the game-changer it promises to be?

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This database will be an ongoing initiative with the aim of providing a comprehensive reference point for InsurTech initiatives across the emerging world. If you’re aware of any initiatives that should also be included in the database, contact antonia@cenfri.org.

Cenfri has embarked on a journey to answer this question from an emerging market lens. A scan of InsurTech initiatives that are active in emerging markets has revealed the following six categories of InsurTech:

• New data and analytics: Digital data generation, communication and analytics are used to inform insurers about customer needs and behaviour patterns in the form of new data and analytics.
• Digital platforms: Insurers or third-party service providers use digital technology to offer insurance products or services via online platforms that take face-to-face or pen-to-paper elements out of the insurance provision, and to bring down delivery costs.
• Technology-enabled partnerships: Insurance providers, mobile network operators (MNOs) or other aggregators and technical service providers (TSPs) enter into strategic, technology-enabled partnerships to take advantage of marketing, client acquisition and premium payments through an established brand.
• Peer-to-peer (P2P): Peer groups (such as owners of houses, cars and household items) team up to absorb one another’s risks, with everyone contributing money to cover the group members’ losses.
• Index-based insurance (IBI): IBI is used to protect against shared rather than individual risks, such as weather fluctuations, disease outbreaks or price loss.
• Demand-based insurance: Demand-based insurance is triggered by an action of the consumer and relies on sophisticated risk modelling technology. It covers asset insurance products, which would not be possible to cover individually under traditional microinsurance.

These six categories were then matched to key challenges in delivering microinsurance to provide an overview of the current status of InsurTech in emerging markets. The challenges in microinsurance are many, but the top five challenges in microinsurance delivery were identified as:

• Lack of information on consumers
• Inadequate access to consumers
• Different and new consumer needs
• Customers inexperienced with formal financial services
• Constrained business models

In short, the outcome of this exercise is that InsurTech shows varying degrees of promise in addressing the challenges faced in delivering value-adding risk protection to low-income individuals. The majority of initiatives focus on solving two challenges: constrained business models and inadequate access to the consumer. Most initiatives operating in emerging markets have only been operational for a couple of years or less and have not yet found broad application in the insurance sector. The well-established initiatives, such as insurance companies partnering with MNOs, constitute almost a third of initiatives identified. Newer technologies such as AI, P2P and blockchain form part of a significantly smaller group of initiatives identified, suggesting that their contribution to addressing delivery challenges is still largely untested.

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This work forms part of the Risk, Remittances and Integrity programme, a partnership between FSD Africa and Cenfri.