When you’re working on a product or service that helps society, it’s easy to hope and believe that people will beat a path to your door to better their lives. But, like many things that are good for us and our families–say, spinach or dental care–they simply aren’t the stuff of dreams. Nobody wakes up thinking about them.
It’s an issue I’ve thought about a lot as I’ve made it a mission to help poor families obtain affordable insurance for a dozen-plus years, a service that definitely fits the spinach category. If you are poor, protection against unforeseen, costly events can make the difference between financial sustainability and financial disaster. But for low-income families worried about where their children’s next meal will come from, planning for the future can seem like a luxury. This in part explains why 98% of people in Africa and Asia don’t have insurance, despite the risks they face. Other barriers are access and affordability, issues that apply to vital services ranging from clean water to education.
So the big question becomes: How do you create demand for a social good? For social “spinach”?
In our efforts at MicroEnsure, founded as an initiative of microfinance nonprofit Opportunity International, we’ve learned two sets of lessons about creating and growing demand for a product that can alleviate poverty. The first is about creating access through affordability and product adaptation. And the second is around creating demand through associating a spinach-like product with one that feels more like daily bread. By applying what we’ve learned the hard way, we jumped last year from serving 2.5 million low-income customers to serving 15 million across 16 counties in African and Asia, acquiring an ongoing 1 million new customers per month. It’s still a drop in the bucket of 4 billion people around the world who lack insurance, but it’s starting, we believe, to tip the scales.
What’s certain is that access is necessary–but not sufficient. It’s a prerequisite to demand. The first step is figuring out what low-income customers can afford, and getting costs in line with that price point. For our service, we immediately thought of distribution via mobile networks, thus eliminating the high cost of insurance sales reps. Mobile telecom is ubiquitous in Africa and Asia, and telcos have “mobile wallet” apps like M-Pesa, Easypaisa, and Airtel Money that allow users to transfer money to one another via mobile phones. We figured if we put our product in the mobile wallet–and made it even more affordable by offering payments in small installments–low-income families would enroll. Not so. One potential customer even told us: “It’s easier to sign up and pay in small installments, but I don’t trust insurance!” Furthermore, it was hard to figure out which mobile wallet to appear in, as most mobile users had multiple SIM cards for multiple networks and spread their airtime minute purchases, or “top ups,” across them all.
Another access issue cropped up early: the need for product adaptation. Beyond being affordable, social “spinach” needs to be easy to eat, if you will. No complicated instructions or processes, but intuitive ones that fit the way low-income people proceed about their lives. And the benefits have to be readily apparent if someone is risking scarce resources on them. In our case, we noticed that even when we did get insurance into the hands of a low-income family, they weren’t taking full advantage of it. We had to strip down the typical insurance process–filling out detailed forms, providing personal information–and create a simpler, easy-to-follow process for enrolling, which meant registering via text rather than a paper form. For claims, we decided to accept an imam’s word as proof of a death, or a claim written on a napkin, and we had to turn them around fast. We paid health insurance claims, via mobile transfers, in as short as one hour. Once initial customers saw the product working–quickly receiving benefits when they filed claims–word traveled.
But it takes more than ease of access and a well-adapted product to generate and grow significant demand. Your spinach has to be in the right aisle of the grocery store, preferably with the marketing boost of a trusted brand. In the case of social “spinach”–water purifiers, smokeless stoves, deworming pills, or low-cost insurance–getting the right distribution strategy and associating the product with a trusted brand can help stimulate demand. For micro-insurance, we realized that we were in the right store but the wrong aisle. We needed telcos to offer insurance as part of their core business, selling airtime, so that we became more deeply associated with their brand. And to interest them, we needed to help that business solve its problem: customer churn. So we partnered with one telecom provider per region—Airtel in Africa and Telenor in Asia—and asked them to purchase and give insurance to customers who stuck with them. If customers purchased more airtime, they received more insurance coverage. The economics proved themselves; the arrangement aided us in insuring the poor, and increased the telcos’ customer loyalty.
We’ve applied these lessons in access and demand to other types of partnerships, most recently to help grow banking to the poor. By using free insurance as an incentive, our banking partners, like Women’s World Banking, Opportunity International, and Barclays, are helping low- and middle-income individuals to increase their savings, in some cases by 200%, which can translate into the ability to buy life-saving medicine or pay for children’s schooling. Indeed, creating access and demand for a social good at scale can provide not only much-needed services to low-income populations, but it can also change the nature of their dreams.