How Insurtech can close the protection gap in emerging markets
Play • 35 min

Emerging consumers present a promising market for insurance, and creative insurance companies have been developing promising models to reach this market for years. Since the 1990s, the micro-insurance movement has demonstrated the benefits of insurance for low-income people, as well as exploring new business models to serve these customers profitably in frontier and emerging markets.

Micro-insurance pioneers, as well as social insurance programs, targeted customers in the informal economy who were underserved by mainstream commercial insurance. Micro-insurance models matched their premiums and benefits to the needs of these groups. Today, inclusive insurance expands this market and product-development work to all those who have not been served by traditional insurance, including the lower middle class, while retaining a particular emphasis on vulnerable and low-income populations.

With this, we moved on to discuss the following:

1. In reference to the speaker's (Susan Holliday) article - How Insurtech can close the protection gap in emerging markets, Susan explained on what Inclusive Insurance would mean, and why it matters in today’s world.

2. The insurance industry as compared to the traditional way of functioning, is responding to the market opportunity today in a very significant way. According to the Insurance Information Institute, in 2005, only seven of the major insurance players were involved in micro-insurance; in 2011, there were thirty-three. By 2016, sixty major insurers, including AIG, Allianz, AXA, MetLife, and Zurich, were active in micro-insurance. Considering this, how the industry would move towards this new equilibrium.

3. In reference to the speaker's article, she (Susan Holliday) have categorically spoken about the opportunities in developing countries and to quote from there - “the penetration of insurance in developing countries is generally much lower than in advanced economies. Typically, the insurance industry takes off when GDP per capita reaches $5,000”. Noting these observations, how insurance and insurtech will play a major role in the economic development and prosperity of the world.

4. The pandemic have significantly widened the protection gap in emerging Asia where the prevalence of under-insurance and non-insurance exists across various different risks, from property to health and mortality, variously also extending to include longevity and liability. Basis this, the speaker expressed her views on how the emergence of insurtech and large VC funding’s for innovative insurtech start-ups can deal with the low insurance penetration specially when we see it from the viewpoint of lack of accessibility, affordability and awareness.

Speaker Bio: Susan Holliday, is an advisor to the International Finance Corporation (IFC) and the World Bank where she focuses on insurtech and insurance for SMEs and women. She has served on insurance sector boards in UK, Brazil and India and is currently a board member of Tribal Planet, a Silicon Valley tech company, and an advisor to Eos Venture Fund and to several start-ups. She has worked across life, health, property and casualty insurance and reinsurance at both global and regional levels and led strategy for emerging markets and fintech. Prior to joining IFC, she was a managing director at Swiss Re, serving as head of strategy for Swiss Re’s global reinsurance business and before this CFO of Reinsurance Client Markets and Group head of investor relations. Before Swiss Re, she was in equity research and equity sales covering the insurance industry at UBS, JP Morgan and Paribas. Ms. Holliday is also a member of the Chartered Institute for Securities & Investment in the U.K. She graduated from Magdalen College, Oxford, with a degree in Modern History and completed Harvard Business School’s Advanced Management and Women on Boards programs.

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