Will insurers leave 90% of Côte d’Ivoire behind?
92%* actually. 92% of the working population of Côte d’Ivoire is in the informal sector, the majority of which is financially excluded. This makes it virtually impossible for these 13M vulnerable people to access the basic financial protection tools necessary to protect their households: protecting one’s children and spouse in case of death of the breadwinner, saving for children’s education, planning for the future, accessing quick and affordable medical treatment, etc. I won’t claim that insurance is the miracle solution to reduce financial exclusion, but I strongly believe this is one of the tools that could greatly contribute to it, alongside the work done by microfinance institutions (MFI).
However, if the top two MFIs in Côte d’Ivoire (Advans and Microcred) are substantially contributing to the reduction of this financial exclusion — injecting each month 11.5 billion Francs CFA ($19M) in the informal sector — insurers have so far failed to secure a firm grip on the informal sector.
As an ILO Impact Insurance fellow, I have been helping the Pan-African insurer SUNU Assurances understand and address this failure for the past seven months — here in Abidjan.
Why this failure?
Vulnerable people are unattractive to insurers:
- Product distribution channels in traditional, urban institutions — such as insurance agencies and banks — are not attended by vulnerable people;
- Absence of data around vulnerable people → Blurred risk profile;
- Low income → Low bottom line figures;
- Inability to communicate with illiterate people, or people with a low educational level.
Vulnerable people are unimpressed with the current insurance offer:
- Opaque Terms & Conditions;
- Laborious and lengthy claim process;
- Unaffordable premium;
- Does not fit their needs and habits:
- Strong reliance on community solidarity;
- Short-term decision-making process;
- Geographical isolation.
Reaching out to these 92% will require insurers to offer:
- Distribution off the beaten track;
- Low premium amount and flexible payment terms;
- Easy claim notification procedure
- Quick pay-off; and
- Most importantly they will need to inspire trust.
The first step in addressing this challenge is for us to get out of our head office and go meet with the underserved of Côte d’Ivoire. SUNU Assurances’ team and myself are currently driving across the country, unlearning what we thought we know about inclusive insurance. Lessons from this market research will be shared shortly with you guys. We expect you to be as surprised as us when you will discover these insights.
* Source: INS — ENV en Côte d’Ivoire 2015