Alexia Latortue, Deputy Assistant Secretary for International Development & Debt, US Treasury, summarizes the opening session of the day: The Case for Financial Inclusion Now.
Setting the context for microinsurance
Unfortunately bad things happen in life – to people and to businesses. Houses burn down, people get sick, and the cost can be very high. If we don’t anticipate the possibility of these things happening and put money aside little by little, then we are in less of a position to take care of it when something bad does happen.
A focus on micro-insurance
So, with micro-insurance, we’re “helping the poor weather life’s storms” to quote MicroEnsure. And by doing so in a way where costs are shared with many others, there’s solidarity across large pools of people.
Serving the markets of tomorrow
The two panelists for this session – Michel Khalaf, President EMEA, MetLife and Martyn Parker, Chairman Global Partnerships, Swiss Re – are regarded as leaders in the commercial insurance and re-insurance space.
They have built their businesses in rich countries but are now seeing growing middle-income countries, growing middle classes, and saying ‘we need to also serve those markets’ as they are the markets of tomorrow.
Reaching new countries and understanding client needs
Our panel discussion showed that these big companies think they can actually make it work in the emerging economies. There is a firm belief that they are able to reach both these new countries and customers.
I think MetLife’s story is the global footprint: they are present in many markets, with the proximity to understand client needs and to adapt products that they’ve been doing for years to these new conditions.
Products have to be adapted to the needs of a different culture or group of people – so physical presence and proximity is really critical.
The Challenge of Distribution
One challenge that came up was distribution – how to get the actual products out to people. One example is rural areas where people are more spread out in places where the premiums are low and it’s hard to recuperate costs. So it’s a cost and technology issue. It’s about having different kinds of distributors, and then figuring out how to create a chain of partnerships that get you to the client in the most cost-effective way.
The need for an integrated response
Another challenge is to get the development folks, the government folks, and the private sector folks, to all really engage upstream. Diana Taylor talked earlier today about different types of communities coming together – this is a space where communities absolutely have to. Health insurance is one of the most striking, because you can have insurance, but if you don’t have good affordable healthcare it doesn’t work. So we really need these communities to talk together and identify the challenges and understand how they each contribute to the solution.
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