Accelerating the growth of the insurance sector through inclusivity, client-centricity and technology

By Dirk Reinhard and Rishi Raithatha

Between 16 – 18 April 2024, Livingstone played host to the Microinsurance Technical Advisory Group’s (TAG) inaugural annual learning and network event on inclusive insurance. The conference was co-hosted with the Pensions and Insurance Authority (PIA) and supported by the Munich Re Foundation, FinProbity Solutions and various other industry players and stakeholders. Nearly 100 insurance and development experts from over ten countries attended the event, which doubled up as the 9th Eastern and Southern Africa Regional Conference on Inclusive Insurance. 

Over six sessions, one workshop and a special retreat for CEOs, participants exchanged experiences and discussed themes and topics on inclusive insurance – in Africa and beyond. The various sessions explored topics that ranged from strategies to drive industry success, the importance of partnerships in the space, why customer-centricity is key to both insurers and regulators, and the impact of having a country-focused advisory body. Importantly, the conference sessions took note of why digital technology is important to grow inclusive insurance and financial inclusion overall – this is enshrined in Zambia’s latest National Financial Inclusion Strategy (2024 – 2028).

Accelerating inclusive insurance growth: Key strategies for success

Representatives from the insurance industry agreed that the full potential of inclusive insurance requires a strategic approach and collaboration among industry stakeholders. Key to this is a regulatory framework tailored specifically for inclusive insurance. Simplified regulations can streamline processes and incentivise participation. Initiatives such as tax reliefs could further alleviate operational burdens, fostering an environment conducive to increased access for underserved customers.

Beyond regulation, partnerships and awareness are key drivers for growth. Successful partnerships hinge on shared vision and mutual benefits, with partners committing to their respective roles. Here, aggregators can play a pivotal role in amassing volume and enhancing operational efficiency, particularly in premium collections. Working with aggregators also resolves the issue of ensuring commercial sustainability.

Trust and education are paramount in inclusive insurance adoption. Establishing credibility and rapport with clients is crucial, especially in informal markets where influencer endorsements have the potential to increase trust. Understanding the dynamics of peer influence and bridging the gap between formal and informal sectors can improve customer awareness, especially given the reach of social media in many low- and middle-income countries (LMICs). A holistic approach to financial viability is necessary. Business models must emphasise long-term sustainability and social impact. Using technology and fostering partnerships based on shared values are instrumental in creating self-sustaining models that drive real social change.

Collaboration between industry stakeholders and regulators continues to be essential for regulatory alignment. Initiatives such as the Microinsurance Technical Advisory Group (TAG) in Zambia can facilitate dialogue, ensuring that regulations evolve to support MI's growth trajectory.

The TAG journey: Championing industry success

The Microinsurance Technical Advisory Group (TAG) is at the forefront of collaboration efforts in inclusive insurance in Zambia. TAG is a multi-stakeholder advisory body dedicated to driving innovation, advocating for an enabling environment and removing systemic market barriers in Zambia’s microinsurance sector. Established with initial funding from Financial Sector Deepening (FSD) Africa and supported by the International Labour Organization (ILO), TAG has catalysed change and led initiatives to promote financial inclusion and resilience among vulnerable populations.

TAG’s journey began with a country diagnostic study in 2009. In the same year, a steering committee was formed, a coordinator was recruited and the first country strategy was developed. In August 2018 in the runup to the International Conference on Inclusive Insurance 2018 scheduled to take place in Zambia, TAG was registered as an organisation. In 2020, it embarked on the ambitious task of developing microinsurance regulation, aiming to create an environment conducive to market growth. Through coherent multi-stakeholder engagement and sector coordination, TAG continues to work towards removing regulatory barriers, stimulating demand, strengthening supply chains and advocating for an enabling regulatory 

Today, TAG remains at the forefront of microinsurance innovation in Zambia, tackling pressing issues such as climate change resilience, low-cost health insurance and gender-smart inclusive policies. It actively explores opportunities in innovation and technology, such as by using data analytics and digital platforms to enhance accessibility and affordability. TAG's diverse portfolio includes initiatives on micro, small and medium enterprise (MSME) insurance, public-private partnerships (PPPs), climate risks and inclusive digital insurance. By embracing emerging trends and encouraging collaboration, TAG continues to drive positive change in the microinsurance landscape.

Partnerships to scale up agriculture insurance to small-scale farmers in Africa

One of TAG’s most impressive achievements is the development of the national Farmer Input Supply Programme (FISP), which includes an insurance component and today covers around one million farmers., Such national schemes covering climate risks play an increasingly important role, especially as climate risks can affect vulnerable communities in Sub-Saharan countries that are highly dependent on agriculture.

Governments have a significant influence in driving demand, which can be achieved either through subsidies or through business-friendly policies, distribution infrastructure and awareness campaigns. The growing use and awareness of technology and digitalisation means that technology remains a pivotal force in shaping distribution channels, facilitated either by mobile network operators, financial institutions or mobile money providers.

Innovations can serve as necessary catalysts to advance into new frontiers of growth. Emerging technologies, such as drones, soil sensors, blockchain, and artificial intelligence are revolutionising distribution systems, paving the way for non-traditional players – like seed companies, development organisations such as the World Food Programme, and social programmes like One Acre Fund – to tap into previously inaccessible markets.

Key takeaways

Overall, most conference participants concluded that the event produced several tangible results:

• Approximately 6.8% of Zambia's population currently possesses at least one non-compulsory microinsurance product, indicating a growing trend in financial protection. While the coverage of around one million farmers under the FISP is commendable, there is a clear demand for additional insurance products, particularly for livestock, suggesting a demand to cover risks beyond climate-related concerns.
• In a move to boost Zambia’s microinsurance industry, Namakau Ntini, the Registrar and CEO of the Pensions and Insurance Authority (PIA), announced the forthcoming release of microinsurance regulations in 2024. This demonstrates the Zambian government’s commitment to enhancing regulatory frameworks in the insurance sector. Furthermore, technology was recognised as a pivotal channel for progress, with the Bank of Zambia and PIA poised to engage in discussions on streamlining related regulations, especially on fintech and mobile payment solutions.
• Finally, the entry of new insurers into the Zambian microinsurance market signifies a positive shift, with previously passive organisations now actively participating. This is a clear reflection of tangible progress in the industry.

Please click on the session title to see details and speakers. Time is CAT.