Underserved populations and market niches are ripe with potential for insurance innovators who are willing to take on the challenge of creating opportunities in areas that may seem unprofitable at first glance, says the chief executive of the Americas unit for one of the world’s largest reinsurance companies. And the ability to reach those markets digitally is key.No one is more needy than the poor.
In Colombia, the economy has been in a growing at a steady pace for the past 10 years. The big global insurance companies have recognized the potential and now that the political and regulatory environment is enabling them to expand their offerings there, local insurance enterprises are being threatened, Smith said.Oh, the politicians have to cooperate. Bummer.
One of Swiss Re’s clients, a Colombian insurer, decided it had to come up with a new approach to capturing and keeping its share of the market. The company’s CEO looked at segments of the market that were being underserved and realized that with Colombia’s booming economy there are “thousands and thousands and thousands of small businesses that have never had insurance,” Smith said.Smart devices. Very smart. Lesson for America;
That CEO decided he could market small business packages to these new entrepreneurs through digital channels, through their smart devices.
Micro insurance and microfinance play an important role in high growth and developing world markets and they are areas in which Swiss Re is involved today, Smith said.
“But I also think [they are] going to play a bigger role in our market here in the U.S.,” he added.
Why? Because there are many young people that are unemployed in this country and big companies are not going to be creating all the jobs that are needed.
“A lot of these young people that are unemployed today, they’re going to have to create their own jobs. They’re going to have to become entrepreneurs and they’re going to have to figure out something and they’re going to have to go out and do it,” Smith said.As they do in...Haiti!
“One thing that’s going to work for them is they’re going to have to get micro loans. … And what we’ve learned is that you can combine a micro insurance policy with a micro loan,” he said.
One place the combination is working well is in Haiti, where Swiss Re has partnered with the micro lending organization, Fonkoze.
“Most of those entrepreneurs in Haiti are women. It’s almost all women – they’re the doers. They’re the creative ones; they’re the entrepreneurs; they’re the ones making things happen. But they are terribly, terribly exposed to floods, winds, droughts, all sorts of things,” Smith said.So the private sector insures them. If the government lets them.