Insurance via mobile phone dials up better health outcomes


MicroEnsure reaches more than 40 million customers in Africa and Asia. © MicroEnsure

When Hassan Olasunkanmi started to lose the feeling in his fingers, he knew the culprit: a years-old injury to his hand that had never healed correctly. The Nigerian business owner, who lived on less than $4 per day, had neither the money nor the insurance coverage that would have allowed him to seek treatment at the time of the accident. The spreading numbness now interfered with conducting business and threatened to cut into the income his family depended on.

But a one-line text put him on a path to better health. The text message was from Airtel, Olasunkanmi’s mobile service provider, which bundled low-cost insurance from MicroEnsure with its data offerings. Olasunkanmi signed up via his phone for an affordable insurance plan. And later that year, when he landed in the hospital for the internal fractures that were causing numbness, he learned he was entitled to receive an insurance check. He underwent the procedure that ultimately restored feeling and function to the injured hand.

Many of MicroEnsure’s clients across Africa and Asia are like Olasunkanmi: just one accident or health crisis away from financial disaster. Without the safety net of insurance, such disasters—especially the death of the family breadwinner—can overwhelm people who were otherwise just getting by. MicroEnsure’s approach to providing insurance to this group was tailored to their resources, needs, and attitudes—and also to their dependence on their mobile phone.

 

Bundling Benefits

MicroEnsure’s original founders began creating low-cost insurance products in 2001, and services grew during a decade in which the company evolved by listening closely to client needs. By 2015, when Olasunkanmi’s phone delivered the text offering affordable insurance options with a simple sign-up through his mobile phone provider, MicroEnsure had become a for-profit company serving millions of low-income clients, supported with a $2.2 million investment from IFC. Global insurance company AXA Group, Sanlam Emerging Markets, and the impact investor Omidyar Network also backed the company.

Microinsurance has long been a serious challenge in search of a creative solution. The economic realities of insuring the world’s poor are complicated: As a group they represent a $40 billion market opportunity, yet they also present greater risks than typical insurance customers and are able to afford only miniscule premium payments.

MicroEnsure’s innovation was straightforward: Using simplified insurance products and terms, the company works through partners that already have large distribution networks among the poor, such as mobile phone networks, microfinance banks, and development institutions. Low-income customers who are new to insurance, like Olasunkanmi, trust these providers already, so it is easier to overcome misperceptions about the function of insurance. MicroEnsure now reaches more than 40 million customers in Africa and Asia.

 

Reaching the Underserved

IFC is the leading investor in companies with inclusive business models, like MicroEnsure, that offer goods, services, and income opportunities to men and women at the base of the economic pyramid.

Since 2005, IFC has committed more than $12.5 billion and worked with over 450 inclusive businesses in over 90 countries. These companies have integrated more than 250 million people into their core business operations. Olasunkanmi’s experience with MicroEnsure exemplifies the principles that inclusive business models strive to practice, such as increasing access to finance; creating or adapting products to meet local needs and requirements; and developing innovative distribution approaches to hard-to-reach communities.

For Olasunkanmi, the easy access to insurance via text message paid off—literally.  From his hospital bed he called the Airtel customer service number to ask how to make a claim. The customer service agent talked him through the process and he discovered that he was entitled to receive N50,000 (about $158.00). The significant figure made paying the total hospital bill of N135,000 (about $428.00) much more manageable, and he sums up his plan to continue using his mobile phone provider to access MicroEnsure with one word: “relief.”

Learn more about MicroEnsure in the report Built for Change: Inclusive Business Solutions for the Base of the Pyramid

To learn more about IFC’s work in Inclusive Business, visit: http://www.ifc.org/InclusiveBusiness

Stay connected: #6DecadesOfExperience

Published in September 2016

 

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