Microinsurance at a High Cost: An Invitation for Innovation

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13 June 2016

Insurers use a mix of distribution channels according to the type of product, service, and customer segment preferences. These go from websites, apps, and branches to agents, banks, and retailers. How effective are these when it comes to selling microinsurance?


When applied to distribution of microinsurance, these channels take on an extremely important role because this type of insurance normally requires small individual tickets and large volumes to make it profitable. Insurers that execute well can provide high scalability while delivering efficiency.

This report shares insights into the use of distribution channels for microinsurance as well as the challenges that insurers face when creating new channels. It also provides a view of new technologies being applied in some countries to reach the underserved.

“Insurers know that new technologies will reduce the cost and disrupt the way microinsurance is being sold. Social media and e-wallets are examples of these,” says Luis Chipana, an analyst with Celent’s Insurance practice and author of the report. “On the other side, insurers are still investing in the same traditional channels that have proven to be effective in the past, but at a high cost.”