Recommendations for Commercial Insurers (Microinsurance in Focus No. 7)

Publication Date: Jan 2008
Published by: CGAP Working Group on Microinsurance
Document Type: Other (PDF)

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How can microinsurers reach the low-income market?

This note states that low-income clients are a new and potentially profitable niche for commercial insurers. However, targeting them requires a different approach that involves:

• Understanding the market’s needs through simple and inexpensive market research;
• Increasing client acceptance of insurance by involving them in product design;
• Using innovative ways to educate the target market about key issues,
• Earning the trust of the market by being transparent in pricing, operations and customer service;
• Maximizing efficiency and leveraging existing relationships;
• Encouraging claims by keeping the claims process simple;
• Creating an internal microinsurance culture;
• Reaching large numbers and ensuring regular renewal of policies;
• Adopting a long-term perspective that does not focus only on returns.