If the giants in insurance really wish to reach the poorest of the poor, they have to think differently about the value of their customers, the effectiveness of distribution and the cost savings required in delivering the product AND its benefits. You have to think how you can deliver FREE insurance for this market and still make a profit to make the effort sustainable. This level of mathematical equations influenced by physical circumstance and emotional stability is beyond most actuaries as their lives are too far apart from the reality of this “new” market. There is a way to do it, but it involves bringing together more than one industry. Each time I have shared it with managers, actuaries, department heads and directors, nothing happened because it involved more than a risk profile and an algorithm. (You can literally see the force field of “Not required for delivery this year.”) In most cases, the individual does not have the incentive or vision to take action.

The world changes in two ways. The first is quick when change is required to save one’s life, the second is slow and with the socially acceptable trend of the time. First, the Insurance industry (and financial industry for that matter) is not threatened yet and therefore will be slow to change. Secondly, massive corporations in general are functionally ineffective and therefore waste more to manage itself as for example a smaller firm. At best, I predict a set of cheap products from the bigger companies. Nothing wrong with that, but the services delivery, product distribution and cost cutting required to serve this market will not happen quickly as it will not make the bottom line in the current corporate structure. Thirdly, what we see in the word today is a combination of individual lives. We as a species fight for ourselves first. Helping the poorest of the poor is simply not in the financial industries general nature.

I say again. You cannot solve a social problem socially, but you can solve it individually and then duplicate on a social scale. That is the nature and socially acceptable method for social solutions. Yet, few financial institutions have developed products for this market yet.
FREE insurance is possible, but you need an open-minded and passionate CEO, then a board that wish to make a difference (massively profitable in the end off course) and a shareholding foundation that understand the value and required participation of the bottom billion for life as we know it to exist.

The answers are simple and the same for all industries (Food, Housing, Sanitation, Education, Security, Financial Inclusion etc.), but are the privileged amongst us ready for the change? Honestly, I think there are a few, but to reach them is a different matter entirely.

Best of luck for the event.

Johann van den Heever (CEO: Heever Solutions)