Published by CGAP, based on key chapters of Protecting the Poor: A Microinsurance Compendium, 4 pages, October 2007, available for viewing here.
In this first of twelve microinsurance focus notes, “Marketing: Promoting Insurance to the Poor”, CGAP provides tips on how to market insurance to the low-income population. Because this market segment is particularly disinclined to purchase insurance for several reasons, including lack of insurance education, limited resources, intangible benefits, short-term perspectives, and trust issues, social marketing techniques coupled with financial education are often necessary to successfully sell microinsurance.
Four main messages are used by microinsurance providers to promote their products. The first is protection, the core benefit of insurance; this message is often communicated through personal testimonies. The second is solidarity, which builds on informal self-help mechanisms are that familiar to this market segment; this message is important in explaining the risk-pooling aspect of insurance. Another is the “positive spin” message, which highlights the security provided by insurance, rather than the risks that clients would otherwise face. Finally, a fourth message is trust, which insurance providers achieve through branding or partnering with trusted organizations. Above all, the paper recommends that the best way to establish rapport is to pay claims.
In turning promotions into sales, raising awareness is the first step: awareness about insurance in general, as well as about specific insurance providers. However, the question of who is better suited to take on the role of providing the public good of financial education – individual insurers or the government/insurance association – still remains. The second step in converting promotions into sales is education on specific products, which must be tailored to different target audiences by taking into consideration various cultural nuances. The last step, activating clients, may involve techniques such as limited enrollment campaigns or prize drawings.
The paper concludes that after-sales service is crucial in backing all microinsurance marketing activities. This is best achieved by facilitating claims submissions and paying claims in a timely manner. Because marketing can make or break an insurance scheme, it must be approached holistically and strategically.
By Mary Fu
Similar Posts:
- MICROFINANCE PAPER WRAP UP: “Women Agents for Financial Inclusion: Exploring the Benefits, Constraints and Potential Solutions,” by Emilio Hernandez et al, Published by CGAP
- MICROFINANCE PAPER WRAP-UP: “Assessing the State of Youth Financial Inclusion in Developing Contexts,” by Niclas Benni, Published by FAO
- MICROFINANCE PAPER WRAP-UP: “Financial Inclusion That Works for Women,” by Sam Mendelson, Published by e-MFP
- MICROFINANCE PAPER WRAP-UP: “Climate Risk and Financial Inclusion: A Regulatory Perspective on Risks and Opportunities;” by Peter Knaack, Peter Zetterli
- MICROFINANCE PAPER WRAP-UP: “Mobile Money, Interoperability and Financial Inclusion;” by Markus K Brunnermeier et al; published by National Bureau of Economic Research (NBER)
