The need for financial services in poorer and often remote communities is universally acknowledged and the practice of making microcredit available is becoming more common throughout Africa. It is in Africa where the need for developmental finance is greatest as the continent is steadily coming to grips with its share of conflict, natural disasters, and health and food issues. Is finance alone enough though?
Africa's largest microfinancier, Blue Financial Services (Blue), do not think so. When resources are limited and unexpected financial losses occur, low-income earners experience great financial disruption that could result in them never being able to recover the losses. To address this common problem, Blue have now expanded the services they are offering to these communities to include much needed microinsurance.
Even though a person's assets may only be limited to a few crops, animals and a modest shelter, the destruction of any one of these could deliver a mortal blow to the family's economic situation. In addition, the loss of a loved one and the consequent cost of a funeral or the loss of a sole income earner could cause devastating consequences for the family. But, if the family was insured, even for a small amount, this would lighten the financial loss and ensure some peace of mind and dignity for the people involved.
Greg Niemand, Blue's insurance divisional director says, "Microinsurance protection products are designed specifically for the protection of low-income earners. Blue's role is to assist poorer communities with the recovery from the financial consequences of common risks. Since these communities can't afford a high level of insurance, Blue is committed to delivering protection in the form of affordable and appropriate insurance products that will return victims of a loss to the same living conditions they enjoyed before the unfortunate event."
The need for insurance is clear and statistics highlight why it is so important to ensure that these communities enjoy the same insurance privileges as higher income earners. Blue identified that two-thirds of human beings suffering from extreme poverty are women who manage to survive on approximately R10 per day. This makes them extremely vulnerable to negative influences. By utilising micro-insurance opportunities effectively, Blue strives to assist in the empowerment, upliftment and creation of sustainability in South Africa and the rest of Africa.
Gaining exposure to these markets takes a unique and strategic, phased approach. Blue utilises various models suited to, and adapted for, the needs of each country.
"Blue is confident that by expanding our product range to include microinsurance, we will assist and empower those communities who will be left destitute if a loss occurs," says Niemand. Blue's implementation of a phased approach in relation to specific countries allows it to:
Blue is currently offering its microinsurance products in South Africa, Zambia and Namibia. Further rollouts are expected in the markets where Blue operates and currently hold brokerage licences.
Familiar products have been selected – such as short-term, life, funeral, accident, business assurance etc – however they have all been adapted to suit the local and cultural differences in each country.
In conclusion Niemand mentions, "Blue is confident that the comprehensive research done in each country helped to identify trends, competitor analyses, consumer education, market appetite and legislative restrictions, allowing us to adopt the best product-to-market model approach."
For more information about Blue's microinsurance initiative or other services offered by the company contact Blue Financial Services:
Tel: +27 12 990 4300
Email: blue@blue.co.za
www.blue.co.za
