Learning From Others' Mistakes

The microinsurance sector has grown from 78 million policies in 2007 to 500 million in 2012 and the exponential growth is expected to continue, since the potential market is estimated at 3 4 billion policies. However, for every scheme that has succeeded, many more have struggled to reach scale, become viable or provide client value, and some have failed altogether. No one really wants to talk about these failures, even though analysing them is as useful if not more as examining successes. Many innovations have resulted from efforts to convert near-misses to successes.

This paper draws on the experience of 12 such attempts. Just like the broader industry experience, some of these succeeded, while others failed altogether. By examining their struggles, the paper strives to identify the most common challenges that are likely to cause severe disruptions or failure, if left unaddressed. They are organized into five clusters: Viability, Client Value, Operations, Partnerships and External.