Free Product Development

We offer free market analysis and product development and receive a small commission only after the successful deployment of the product. If the product is not successful or is not launched, we do not receive payment. This motivates us to design products that meet clients needs and remain competitive; our interests are aligned with those of our partners.

Our standard approach is to carry out market research with our target clients and work with the existing organizations that serve them to find out what their needs are. We then seek to address these needs, taking into account the availability of insurance supply and local regulatory requirements. Once the product is launched, it is monitored and altered based on customer feedback in a continual cycle of product improvement.

Product Examples

The Micro Insurance Agency works with its local insurance company partners to develop a full range of products to meet the needs of its clients. To date we have developed products for over 25 microfinance organizations in ten countries. Those products currently cover an excess of 3,250,000 lives and broadly fit the following categories:

• Credit Life: the most basic of products protects the lending institution against the inability of the borrower to repay the loan as a result of her death or disability.
• Term life / funeral insurance: provides a fixed payout upon the death of the client, spouse, children, or even parents during a fixed period. The payout is normally designed to pay for the cost of a funeral and provide a sum to the bereaved family to provide for immediate needs. This product can also be extended to include coverage for disability on a permanent or temporary basis as well as critical illness coverage.
• Livestock: provides a fixed benefit upon death of head of livestock; especially useful in societies that use livestock as an informal savings mechanism, or for lending programs that lend to farmers for the purchase of cattle.
• Property insurance: cover for losses arising from a range of perils including fire, natural disasters, flood, wind and even theft. This product is especially useful for microfinance lenders providing secured loans to individual borrowers.
• Index based crop insurance: lending to smallholder farmers is often considered too risky due to the possibility of a climatic event such as a drought making it impossible to repay a loan. Crop insurance products can be designed that use an index such as rainfall to determine if and when a payout is due. This product protects the farmer and the lender and so enables rural credit programs to expand with mitigated risk.
• Package policy: this combines a number of other coverages to meet a specific need; an example from Uganda uses credit life, funeral insurance and property insurance combined in a single microfinance “care” policy. The benefit is easier administration and a lower cost for clients.
• Health insurance: by working with health management organizations (HMO’s) we can provide full in-and-out patient coverage including access to Anti-Retroviral Drugs for individuals as well as families.

Distribution of insurance products

We work with a wide range of insurance companies including locally incorporated and multi-national firms. While the majority of our outreach is through microfinance organizations, we also seek to work through other organizations that reach currently unserved and vulnerable people with other products and services, which expand the reach of our insurance products well beyond micro-loan clients.

Working through the Micro Insurance Agency as an intermediary enables insurance providers to reach the scale necessary to provide low cost products to what are considered traditionally risky populations, without restriction to the size of the institution distributing the product. Without an intermediary, it is only viable for insurance companies to work with institutions with a very large client base because of the scale necessary to make profit. Our role as third-party intermediary enables all organizations to gain access to the insurance products demanded by their client base. Now able to reach scale, insurance companies can decrease their premiums thanks to the client base of multiple institutions and their relationship with the Micro Insurance Agency.

Key Partnerships:

• American International Group (AIG)
• Capital Finance Corporation
• CARE International
• Deloitte and Touche Actuarial Services, UK
• Daan Sa Pag-unlad, Inc.
• Faulu (Food for the Hungry)
• Habitat for Humanity
• Hollard Insurance Company of South Africa
• Insurance Association of Malawi
• Malawi Rural Finance Company
• Opportunity International
• Opportunity International Bank of Malawi
• National Insurance Corporation of Uganda
• National Smallholders Farmers Association of Malawi
• State Insurance Company of Ghana
• Swiss Re
• TSKI & Kauswagan Bank
• World Bank’s Commodity Risk Management Group
• World Vision

Back Office Administration

With average premiums of approximately $1 to $2 per month, minimizing the cost per transaction is critical in order to make the delivery of micro insurance products a sustainable venture. As a result we have developed significant back-office administrative capability which, coupled with our scale, allows a wider range of sustainable products to be offered. With our own Automated Insurance Management Software (AIMS) we are able to provide our partners with full back-office administrative capabilities which greatly reduce their administrative burden. We are able to keep track of who is covered and administer claims on behalf of our partners which has lead to our average claims payment being just six days across Africa and Asia.

Education and Training

Education and training is one of the most important factors in the successful delivery of insurance products. While risk avoidance is understood, formal insurance mechanisms are often totally unknown. The Micro Insurance Agency provides full training to the staff of our partner organizations as part of launching any new product, and is currently working on deploying a micro insurance curriculum for client education.

¹upon receipt of all necessary documentation