Microinsurance Distribution Channels: Insights for Insurers

This paper focuses on the pros and cons of distributing microfinance through different distribution channels, particularly financial institutions, community-based organizations, retail chains, mobile network operators, employers, and direct sales. It tends to address three important questions relating to each of these distribution channels. These are:

• What can the various distribution channels do for insurers? In this section, the authors discuss the capabilities of each distribution channel on seven grounds: client understanding, product diversity, scale, brand and trust, priority, cost, and partnership risk;
• What can the insurers do for the various distribution channels? This section focuses on how insurers can solve the distributor’s problems, focus on agent productivity, and deliver client value. It also provides suggestions to minimize the chances of failure of these distribution channels;
• Is a particular channel right for an insurer’s target market? This section identifies the type of markets in which a particular distribution channel is likely to be most efficient.

The paper also provides examples of successful organizations for each type of distribution channel. Apart from the conventional channels, the paper briefly discusses three other possible distribution channels: healthcare providers, post offices, and utility companies.