What is the Partnership Model?
Microinsurance has huge market potential. The MicroInsurance Centre at Milliman helps providers tap into this potential through the partnership model, in which regulated insurance companies underwrite and provide microinsurance products while provision or delivery of the product is done by delivery channels. Delivery channels can be a wide range of organizations, but are typically local institutions with direct ties to the low-income population such as microfinance institutions (MFIs), retail shops, religious institutions and others. This model works to create an effective partnership focused on efficiently providing S.U.A.V.E (simple, understood, accessible, valuable, and efficient) microinsurance products to the low income market.
What are the benefits of the Partnership Model?
For the insurer?
The partnership model generates benefits for both sides of the arrangement. On the insurers’ side, the partnership allows the product to reach a segment of the population that would be difficult or impossible to access without a partner that has ties to the target market. Insurers typically lack the trust of the market, as well as an understanding of the clients. This hinders their ability to sell within this market. By partnering with organizations that already work with the low income market, insurers can leverage the trust and access developed by the delivery channel and the knowledge of their clients that these channels bring.
For the delivery channels?
Delivery channels benefit from partnering with regulated insurance companies as well. As a result of the partnership, the delivery channel is not required to take on risk that it would have if it were to supply microinsurance independently. This also allows delivery channels to focus on their core business activities and better serve clients. Through the partnership, delivery channels add breadth to their product offerings, are better able to help their clients with the risks they face, and have the opportunity to improve the functioning of their core product because of the stability that insurance brings to their clients.