Madison Insurance, Zambia Case Study

This case study documents the experience of Madison Insurance Zambia Limited (Madison) in providing insurance to MFI clients through a partner-agent model. The paper discusses:

• The steady expansion of micro-insurance provision in Zambia;
• Credit life and funeral coverage as the main insurance products;
• The difficulty in tracking the impact of HIV/AIDS on portfolio quality;
• The MFIs that Madison works with;
• The lack of a regulatory framework for micro-insurance.

The paper discusses how partnering with MFIs has helped both Madison and the MFIs. It then presents a number of lessons for the provision of micro-insurance through the partner-agent model, which include:

• The insurer should expand its role to include client education, marketing and assessing client satisfaction;
• MFIs should ensure that clients understand exactly how much they are paying for insurance;
• Staff responsible for servicing insurance products should receive adequate training to enable them to effectively educate clients;
• Insurance should be well marketed;
• Funeral insurance could be made voluntary, especially if it is covering other family members;
• There should be no link between insurance benefits and loan repayments;
• The MFI should check whether it has the capacity to act as an agent of insurance;
• Profit sharing seems to work better than giving the MFIs a commission for their efforts;
• Micro-insurance facilitates access to loans by HIV patients who are not yet in a critical condition.