How Mobile Phone Carriers Are Helping Insure The 4 Billion People Who Live Without A Safety Net
Wednesday, June 4, 2014
With this system, every time a customer tops up his SIM card, he gets free insurance coverage. The model helps carriers increase brand loyalty and gets people in poverty comfortable with the emerging concept of micro-insurance.
The perverse thing about insurance is that those who need it most are least likely to have it. Worldwide, up to 4 billion people live without cover, meaning if they get sick or have an accident, their lives could be ruined.
In the last decade, insurers have developed “microsurance” products to help fill in this void: extremely simple policies that are easy to understand, and straightforward to administer. More than 500 million people now have some form of microinsurance, according to the latest available figures.
The problem is, it can be difficult to persuade someone who’s never had insurance to buy it. Often, poor families have more immediate needs. They’re unfamiliar with how insurance works. Or they distrust the idea. After all, it requires trust to imagine a company is really going to pay out when called upon.