Microinsurance in Uganda: A Case Study of an Example of the Partner-Agent Model of Microinsurance Provision - AIG/FINCA Uganda - Group Personal Accident Insurance
McCord, M. J.
Publication Date: 6 Dec 2000
Published by: MicroSave
Document Type: Paper
Making insurance work for microfinance institutions
Institutions have created programs to provide insurance products through various models for insurance provision. This case study reviews the Partner-Agent model between a private insurer (AIG, Partner) and a microfinance institution (MFI) in Uganda (FINCA, Agent) to provide group accident insurance to the MFI's clients. The paper discusses mechanisms of the model and the satisfaction level of the stakeholders in detail.
With a view to provide a better understanding of the process, the paper discusses the following aspects of the product life cycle from the perspective of, both the Insurer and the MFI:
- Market which the parties seek to target and justification thereof;
- Product development and testing;
- Delivery channel and partnerships;
- Costing and pricing;
- Product launch and marketing;
- Impact of the partnership on the human resources, operations and systems of the partner and the agent.
As a conclusion, the case study states the results of this arrangement:
- Financial and operational results of the partner and the agent;
- Feedback of the customers on the product / services.
It also summarizes the learning from the experiences in the case study as:
- New product requires a formal development, testing, and implementation structure;
- Insurance being a relatively new concept for the MFI staff, appropriate training to them becomes critical;
- To avoid revision, premium prices must be structured to cover costs from the start;
- For better coordination with each other, both the agent and the partner should provide a single point representative to address pressing issues;
- As the financial risk lies with the insurer, the MFI needs to play fair by providing quality service to the clients, at the same time ensuring that genuine claims are only made to the insurer.
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