Cheap insurance in developing countries is needed, but because many low-income people live in isolated regions, closing sales remains difficult. Bima, who has begun to access this untapped market, is now one of the largest mobile insurance platforms in the world. In just three years, Bima has acquired 4 million clients in Africa and Asia and is adding 400,000 new subscribers per month.
“The potential of mobile phones as a distribution channel in emerging markets is revolutionary: according to the World Bank, there are now over six billion mobile phones worldwide, with 77 percent of subscriptions in lower-income countries. Following the success of mobile payments and banking in these markets, Bima and microinsurance are at the forefront of a second wave of mobile financial services,” states LeapFrog Investments, the self-proclaimed “world’s largest investor in insurance for emerging market consumers.”
Less than five percent of people in the developing world have insurance policies, which creates significant financial setbacks when a death or injury occurs in a family.
Bima has been tackling many of the obstacles—education, pricing, premium collection—that prevent poor people from obtaining such benefits. For instance, Bima products such as life, accident and health insurance cost “as little as $0.20 to $6.00 a month.”
Last month, Leapfrog invested $4.25 million in Bima, which will allow the company to expand even further within Africa and Asia as well as reach into new markets in Latin America.
Keep an eye out for other microfinance insurers that are inspired by Bima’s success and take advantage of mobile platforms.
Bima CEO Gustaf Agartsson stated in a company news release last month:
“Just as banks ultimately embraced mobile money, insurers will become rapid adopters of mobile technology.”
(“Microinsurance opportunity” chart by Bima.)