Responsible Finance Forum

Responsible Mobile Insurance

28 May 2015
Source:  Federal Ministry for Economic Cooperation and Development (BMZ)
 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

The German Development Cooperation supports sustainable Economic Development in its partner countries. Insurance market development has become an important approach within BMZ’s financial systems development agenda. Insurance is an important risk mitigation tool to prevent families and small enterprises fall back into poverty when a risk event occurs, and sustain other development efforts.

Mobile insurance is taking off rapidly in emerging markets with a range of different product innovations and distribution partnerships. Some supervisors are innovating with a test-and-learn approach responding to the emerging mobile insurance models and their challenges. Industry self-regulation is at an early stage and not dedicated to mobile insurance. A responsible finance approach, entailing the pillars consumer protection regulation, financial institutions’ self-regulation and financial capability is required in order to ensure sustainable growth of the dynamically emerging insurance markets

Responsible Finance (RF) has recently developed as a coordinated approach aimed at driving responsible practices in financial inclusion based on public and private sector interventions that encourage and assist financial services providers and their clients in improving their understanding and practices to create more transparent, inclusive, and equitable financial markets balanced in favor of all income groups. Responsible Finance brings the focus back to the needs of the end-beneficiary clients by operationalizing practices that promote a more transparent, inclusive, client-centric, and equitable delivery of financial products and services.

With the phenomenal growth of mobile insurance, insurance sold through or with some level of assistance by mobile network operators (MNO), it is important to assess these new initiatives through the lens of responsible finance to determine the risks and potential responsible practices.

Mobile insurance has huge potential due to the high mobile penetration and the growing mobile money industry and is driven by a number of factors and stakeholders. Innovations are found in new distribution partnerships and products.