Product Innovations for Micro Insurance

Micro insurance is often treated as a scaled-down version of traditional insurance. But this form of insurance is different. Micro insurance is a developmental tool to protect low income populations from risks. This insurance is rapidly gaining traction in emerging markets across the globe. However, the progress on this front has been tardy despite the use of technology to penetrate the market and grow the business. This is due to absence of product innovations and less awareness about benefits of micro insurance. Low income communities need to be treated as customers. These customers also need a value proposition. Claims payment process is the moment of truth in micro insurance as this is what will build trust among the low income population. Innovations in this area need exploration. Micro insurance covers bundled with saving options are one among the many new product ideas that are suggested in this work. Product innovations must be complemented by creative methods of distributing micro insurance. Lastly, insurers must not limit themselves to offering covers for protection of risks- they must go beyond offering their unstinted support for community development activities.