Emerging Insight: How partnerships benefit aggregators and clients alike
7 October 2022
MiCRO was founded in 2011 with the goal of developing sustainable parametric insurance. This is a type of insurance based on indexes, such as wind speed or the amount of rainfall, which can trigger a payout in the event of damages related to natural calamities.
Low awareness of insurance among vulnerable populations and the novelty of parametric insurance were challenges for MiCRO. Although MiCRO had a few partners to distribute its product (such as microfinance institutions and NGOs), these aggregators were not always familiar with the product. For the partnership to be successful, MiCRO had to convince the channels of the value that parametric insurance would offer – not just to their clients, but also to the channels’ businesses.
MiCRO's strategy has been to highlight those insurance features that add value besides financial returns. Although commissions must make sense for all those involved, for aggregators it is even more important that the insurance product allowed them to achieve additional objectives, such as differentiating their services in the market or positioning themselves as sustainable development innovators. An example of this is the partnership with Banco Banrural in Guatemala, where credit lines were designed for microentrepreneurs and small farmers. Once these clients acquired a loan through Banco Banrural, they would have the benefit of accessing insurance based on MiCRO indexes, thus generating a positive impact on the Guatemalan population.
To learn more about MiCRO’s expansion, and what it did to sensitize new markets and partnerships, see our latest Social Finance Brief on MiCRO.
Low awareness of insurance among vulnerable populations and the novelty of parametric insurance were challenges for MiCRO. Although MiCRO had a few partners to distribute its product (such as microfinance institutions and NGOs), these aggregators were not always familiar with the product. For the partnership to be successful, MiCRO had to convince the channels of the value that parametric insurance would offer – not just to their clients, but also to the channels’ businesses.
MiCRO's strategy has been to highlight those insurance features that add value besides financial returns. Although commissions must make sense for all those involved, for aggregators it is even more important that the insurance product allowed them to achieve additional objectives, such as differentiating their services in the market or positioning themselves as sustainable development innovators. An example of this is the partnership with Banco Banrural in Guatemala, where credit lines were designed for microentrepreneurs and small farmers. Once these clients acquired a loan through Banco Banrural, they would have the benefit of accessing insurance based on MiCRO indexes, thus generating a positive impact on the Guatemalan population.
To learn more about MiCRO’s expansion, and what it did to sensitize new markets and partnerships, see our latest Social Finance Brief on MiCRO.