Digital Insurance Agenda

Empowering communities to move towards inclusive insurance

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on Feb 7, 2022

Create Impact By Reimagining Financial Inclusion, is what the core message is of the DIA Impact Series is. The DIA Impact Series are editorials focused on the social and economic impact of insurtech. Insurtechs with impact are turning 5 levers to overcome the flaws in the current system. They combine unique new ways of organizing, with their inclusive insurance models. In our previous editorials, in which we highlighted ACRE Africa and BIMA , we zoomed in on the 3 of the 5 levers. Today, we will explain what the 4th lever is.

Through these inclusive insurance models of BIMA and ACRE Africa, you can witness the shift from a siloed single insurance service to joint integrated delivery. And in such a way, that it fulfills the daily needs of the families served. In case of BIMA with remote health advisory services, for ACRE Africa this is offering it in stores where the farmer buys seeds for farming.

The 3rd lever ‘Everybody Plays’ is demonstrated perfectly by BIMA and ACRE Africa. They serve millions of low-income people who’ve never bought an insurance in their life. To name a number: 75% of BIMA’s customers buy an insurance for the first time in their life. And they collaborate with partners, that bring financial services to the people, for BIMA this is the mobile network operators, for ACRE Africa the seed seller, for example. Next to ‘Everybody Plays’, it is important to ‘Play As A Group’ (the 4th lever). Communities as a group have social capital, decision power and power to influence. Communities can take control and contribute to managing an insurance. Therefore a powerful path to inclusive insurances is to empower groups.

Uplift Mutuals is incorporating the strongpoints of a community in its solution to healthy living. Therefore, it is a great example of a game changers that captures that fourth lever.

Game changer: Uplift Mutuals
Uplift Mutual offers preventive care in combination with health micro-insurance, for and by the community members. This all started with women: when women run a health insurance scheme, they will focus on not getting sick in the first place. That’s why the insurance is offered in combination with affordable medicines and preventive services, at their doorsteps. The representatives of the communities run the health insurance scheme themselves. We have asked Shailabh Kumar, Founder and Executive Director of Uplift Mutuals, to tell us more on the power of the community

How do you serve the poor people’s daily needs?
Shailabh: “In India, every year seven thousand people fall below the poverty line, because of health care expenses on the outpatient care and medicine side. There’s 64 to 70% out-of-pocket expense on medicines and outpatient care, whereas 30% on hospitalization. But if you look at the entire product design in insurance, especially in India, you’ll find that there are no such products. That is one problem.

Second thing is, there is a huge trust deficit when it comes to insurance. People don’t see a value of paying for something that may or may not happen. Next to that, there is no transparency in decision making and it does not help them on their daily needs. Insurance will only help them if they fall ill and the question is often: “What happens when I don’t fall ill?”

That was a trigger point for us; to understand that there is a massive design mismatch between the people’s needs, the demand and what is available in the market. “

What is the magic trick to include prevention in your model?
Shailabh: “What we realized was that if we put a doctor in the slum or in the villages, we created a kind of response that we never ourselves would have guessed. One, it made the insurance product tangible: it helped us to reduce the frequency of risk on one hand (for the insurance side). The second thing was a 24/7 helpline, manned by a doctor. After that we added health screenings, then wellness sessions. Then we understood that there is a high out-of-pocket expense on medicines and we set up a pharmacy, which would cater to these members. In total, creating a full service line to only service our members.”

How do the representatives of the communities run the health insurance scheme?
Shailabh: “The claims are decided within people – so, women come together and decide on this case. That has created a level of ownership which was very difficult otherwise, because in traditional insurance you don’t have this type of involvement.”

And what about the role of the group in your model?
Shailabh: “So, we have a platform in which we design the product, design the process, sit with the community and we run all the different parts of the services and product for them. That means that they are not bothered with daily management of this, they àre part of the decision making whether its product design, claim decision making or services they request.

We give the community the platform over which they can run their own as mutuals.”
This editorial is part of The DIA Impact Series. Interested in learning more about this subject? Click here to read the book Reimagining Financial Inclusion or check out the panel discussion Financial Inclusion For All presented by Erlijn Sie on DIA TV.

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