According to Swiss Re, the microinsurance market is worth around $40 billion in total. This is the market where BIMA insurtech startup from Stockholm operates, as we have already mentioned here, founded by Gustavf Agartson, a sort of hero of sustainability, who in fact brought the social impact in the insurance sector.
“When I started looking at emerging markets – said Gustaf Agartson to BBC– mobile penetration was about 70%, but insurance penetration was only about 3%. Insurers in DCs had the same approach as in the Developed World, linking insurance with bank accounts. But a lot of people in these countries don’t have a bank account”.
What does BIMA exactly do?
BIMA creates very customer-centric micropolicies, considering the needs of a population living with less than 10 dollars per day, with no access to basic services (including health and financial services), and lacking the basic infrastructures elsewhere taken for granted. However, they are on an equal footing with the more developed countries: mobile phones.
BIMA business model is based on the partnership between mobile carriers and insurance companies, essentially covering the gap between these two providers to deliver life, health and accident insurance policies via mobile phone. Benefits for all: mobile service providers strengthen their customer relationships and insurance increases their customer base in hard-to-access markets, while the company offers collaboration in product development and distribution through its own network of trained local agents: in the reference markets for BIMA, creating the “culture” on the importance of insurance is essential and human contact is invaluable in this respect.
For their part, customers obtain some insurance cover at an affordable cost for them: the Mobile – Delivered Insurance platform allows subscription of a “pay-as-you-go” policy that keeps the payment from the user’s mobile credit, with a very low figure compared to the standards of Western countries: with about 5 euros there are insurance plans for the family lasting one year.
“93% of our customers earn less than $10 a day”, said Mathilda Strom, CEO of the company “and 54% of them even with less than 2.50 dollars a day. However, these people often buy recharges for their mobile phones to make calls, often paying as little as 50 ¢. This is the regular, small source of income that BIMA is drawing from”. A seamless purchasing experience, because Bima technology is integrated in the services of the telephone provider and the cost required for the policy is not perceived as an extra outlay, since it draws on the “mobile” credit already paid by the customer.
The social impact is clear. The company already has over 24 million customers in the Asian, African and Latin American markets, about 575 thousand new customers per month; it operates in 14 countries, including some of the poorest in the world, such as Ghana, Sri Lanka, Bangladesh and Pakistan.
BIMA has collected substantial investments in several rounds, but the most recent one led by Allianz X, the venture capital branch of Allianz, has nearly reached $100 million, all earmarked for the growth of BIMA in new markets.
The emerging ones, those on the wrong side of the “digital divide”, but nevertheless extremely interesting today for the insurance companies that have swamped the traditional markets. Certainly, however, to reach and become suppliers of these very low-income populations requires new models, such as the one designed by BIMA, which starts by meeting real needs, very important and at a sustainable cost.
From a business perspective, microinsurance plans are expected to expand as these consumers’ fortunes improve, as it often happens in fast-growing emerging markets.
“In some cases we have stopped calling them ‘microinsurance’,” Strom said. “It is essentially an insurance for people who have never had it before.
One of BIMA’ strengths, also from a social impact standpoint, is the development of its technological platform, focused on a completely mobile customer experience easy to use even with claims..
In some countries – Bangladesh, Ghana, Pakistan and Paraguay – BIMA is even testing a mobile health service that offers customers unlimited access to doctors over the phone. The customer’s first contact is with a doctor on the phone and if the doctor cannot solve the problem then helps the customer to take an appointment at the hospital and the insurance covers the visits.
The company now plans to expand mainly in Central America.
BIMA won the 2017 edition of the Financial Inclusion Challenge in Hong Kong, here the video.