Just as technology is changing the traditional insurance industry, it’s having a tremendous effect on microinsurance. The rapid adoption of mobile phones in emerging markets means that regions with poor infrastructure and dispersed consumers can still be candidates for microinsurance.
Limits to technology adoption
Despite increased adoption of mobile phones in emerging markets, there are still some challenges to connectivity:
- The reluctance of agents and customers to use new technology.
- The inability of distribution partners to afford new technology.
- The high cost of information systems capable of dealing with large volumes of small-value transactions.
- The lack of infrastructure needed to ensure connectivity.
- Regulatory or policy changes that can impede new technology implementation.
Opportunities from technology adoption
Even still, new technologies can enable success with microinsurance, particularly where three factors are concerned:
- Mobility can be a game changer, enabling innovations like point-of-sale technology, solar-powered deposit machines and digital pens.
- Real-time connectivity can enable bulk processing and servicing of low-premium policies, requiring minimal manual intervention and reducing costs.
- Flexibility and scalability are created by cloud computing, notably software-as-a-service (SaaS) platforms.
Accenture believes that microinsurance offers insurers an excellent entry point to emerging markets. Learn more about microinsurance with previous posts in this series:
- Part 1: Introduction to microinsurance
- Part 2: Characteristics of microinsurance
- Part 3: Business models for microinsurance
- Part 4: Operating models for microinsurance
To learn more, download Succeeding at Microinsurance through Differentiation, Innovation and Partnership (pdf; opens in a new window).