Insurers Leverage New Technologies and Reinvent Business Models to Reach Underserved Consumers, Report Finds
The report, "
- Using new distribution channels and aggregators – from telcos to farmer cooperatives – to identify and connect with low-income customers
- Implementing new business models and products to provide and administer the risk mitigation solutions that low-income customers need
- Deploying "insurtech" innovations and digital channels to connect with, and service, low-income customers
The market for inclusive insurance is vast, largely untapped, and potentially profitable. The confluence of rising incomes in emerging markets, and new technologies that reduce risk assessment and distribution costs, offer an opportunity for more insurers to meet the needs of the estimated 3.8 billion people who remain underserved or unserved.
"Even among people with very little disposable income, insurance can be a vital tool to manage financial risks and mitigate the effects of shocks," said
The inclusive insurance strategies highlighted in the report include eliminating costly verification screenings to identify "exclusions," offering insurance policies without any fine print, triggering payouts based on verifiable events or data instead of claim submissions, and engineering more frequent payouts to consumers. The report also features examples of protective life and health insurance products designed to serve low-income customers, as well as newer products related to climate change, natural disasters, and food security.
"This report invites us to re-think the concept of insurance and its fundamental role in society. It is our hope that this report enables our diverse membership—particularly those financial institutions not yet active in insurance—to leverage their expanding work with underserved customers to help close the insurance gap," said
The new report is part of a two-year initiative from CFI and the IIF, with support from
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