Growing Inclusive Insurance Markets: Emerging Trends and Supervision

LAGOS (Capital Markets in Africa) – Insurance softens the blows of misfortune. However, many low-income earners lack access to insurance and are thus deprived of the cushioning insurance provides although they are the ones in most need of insurance protection as they have little to fall on. For smallholder farmers, for example, besides the lack of access to insurance leaving them exposed to the varieties of the

weather, it can also disincentives them from investing (extra) in high-yielding, disease-resistant seed variety out of fear of losing their investments if weather conditions become unfavourable. In contrast, a commercial farmer with access to insurance can invest in potentially profitable ventures, confident that if misfortune strikes, they can recoup their investments through insurance. The lack of insurance protection, therefore, deprives the most vulnerable people the essential safety nets to help them break the vicious cycle of poverty.

More and more, insurance supervisors around the world are recognising the critical role they can play to make insurance markets more accessible and inclusive. An inclusive insurance market goes beyond providing insurance products targeted at low-income earners; it embraces all insurance products aimed at the excluded or the underserved market. For example, many Latin

American countries promote access to insurance or increase insurance penetration by using alternative distribution channels, dubbed “mass insurance”. Unlike micro-insurance which targets a specific segment of the market, mass insurance unlocks channels and significantly widens outreach without any target consumer in mind. Yet, since mass insurance products are standardized and straight forward, they serve the excluded and the underserved segment of the market.

An extract from Africa’s Insurance Markets Uncovered. Please download by clicking: INTO AFRICA PUBLICATION: MAY 2017 EDITION.

Contributor’s Profiles:
Janice Angove is responsible for coordinating A2ii’s regional implementation work in Sub-Saharan Africa, strengthening cooperation and supporting capacity building for supervisors in the region. She has worked in the areas of micro-insurance and capacity building for insurance supervisors in Africa for more than 8 years. Her experience covers the development of micro-insurance regulations for several Southern African countries, capacity building for insurance supervisors in Africa and research into the business case for micro-insurance. Janice is a qualified actuary and lectures part-time Wits University.