One of the main points I’ve tried to argue in this series of posts is that while small-ticket insurance in mature markets and microinsurance in emerging markets is different in many respects, the key to success is recognizing and capitalizing on the similarities. These, as I mentioned before are:
- In both cases, the products need to be simple.
- While the customers may be different, the need to understand them is vital in all cases – an advanced data collection, analytics and predictive modeling capability is essential for both markets.
- Technology plays a similar role in both, facilitating access, geolocation, payment and claims.
- Processing has to be straightforward and efficient, yet flexible enough to manage the unique payment mechanisms and claims triggers that are characteristic of small-ticket insurance.
- Partnerships are key. This is certainly true in emerging markets, but also in mature markets for co-branding or white-labeling small-ticket products.
Because of these similarities, there are big opportunities for cross-fertilization throughout the value chain. There is also a strong case to be made for insurers to increase the integration of their products. Using a single operating platform can contribute enormously to scale and efficiency. Adopting reverse innovation to introduce the successful components of one product to others in other parts of the world can boost effectiveness. Each, in its own way, helps to improve viability.
I believe strongly that small-ticket insurance will grow rapidly over the next few years. Many insurers are already in the market, but most are not optimizing their operations. Those that recognize what the two types of small-ticket insurance have in common, and adopt strategies that support both, will find it easier and cheaper to achieve simplicity, affordability and accessibility – the key factors for success.
I hope you’ve found this series of blog posts interesting and useful. If you’ve missed any of the posts, you can find the full series here. And if you’d like to download the detailed report, you can do so here.