Like many of her peers, Deborah often has her eyes glued to her mobile phone. When she’s not chatting to her family, following friends on Facebook or placing orders for her small business, Deborah is also using her phone to check her bank account details and pay her electricity bill. In this way, she sounds like many young adults from New York, London or Tokyo. But Deborah is from Lagos, Nigeria, and is just one of the millions of low-income residents from developing countries who are merging digital technology into their daily lives.
The package of digital services continues to expand and is not just suited to high-end consumers. Digital financial services, in particular, are becoming more pervasive and targeting people across the income spectrum, giving them access to mobile banking, credit, remittances and insurance.
Microinsurance, or insurance for the low income and mass market, specifically, is a fast-emerging financial service taking advantage of low current penetration rates and the increasing need to protect emerging consumers from financial shocks. Since 2007 microinsurance grew from 78 million clients to more than 263 million worldwide as at 20131. The growth is encouraging, but it is still a small portion of the 1.5 billion to 3 billion unserved and underserved consumers that make up the potential market (Swiss Re & Lloyds).
- For a deeper look at this topic, please see: Solving the Microinsurance Puzzle