Mass and Microinsurance: Consumer Protection in Inclusive Insurance Markets

The 3rd Consultative Forum, which took place in Mexico City in November 2014, brought together the industry and regulators to discuss consumer protection in inclusive insurance markets for both mass and microinsurance. The event, which is organised bi-annually by the Microinsurance Network in partnership with the African Insurance Organisation (AIO), the International Association of Insurance Supervisors (IAIS), and the Access to Insurance Initiative (a2ii), draws out a series of key take-aways which are summarised in this 3rd Consultative Forum Note. Take-aways for insurers and regulators include:

• Product value is very important in mass market insurance policies, and will generate trust and increase take-up over time.
• Fairness to the client in low-income environments includes sufficient advice, accessible and prompt post-sales services; Claims processes that are simple and rapid, and a well-trained sales force for any kind of channel the insurer uses.
• Effective consumer protection needs to look at the claims process and respective data. Regulators should monitor and analyse industry claims performance. Claims processing periods and related ratios could be monitored by supervisors or be required by the industry associations. In any case, separate data sets are needed.
• Two sets of regulations for mass insurance and microinsurance can create confusion in the industry and allow for regulatory arbitrage. A single, overarching dedicated regulatory framework for financial inclusion including inclusive insurance could encompass the advantages of both types of regulations in terms of innovative channels, high value products, and fair treatment of consumers.