Making microinsurance sustainable and profitable

As the world grapples with global economic recession, no one is left more vulnerable to unexpected accident, illness or disaster than the four billion people living on less than $2 per day. According to a new report released today by global management consultancy Arthur D. Little, offering microinsurance to this large and disparate market is one way for downturn-hit financial services companies to develop a new profit stream while regaining customers’ trust and working toward a more responsible and sustainable world. 

Characterized by low premium and low coverage limits, microinsurance consists of low-margin, high-volume products designed specifically for low-income people and businesses not served by typical insurance schemes. In “Emerging Markets in Microinsurance,” Arthur D. Little argues that despite potential barriers such as distribution and developing a profitable product at such a low-margin, insurers entering this largely unexplored market can succeed by developing a bespoke strategy and product offering suited to the specific needs of the low-income consumer:
  • Simplify products – lowering associated labour costs while maintaining quality without high overhead
  • Offer in-kind benefits (funeral service, groceries) rather than lump cash sums
  • Engage in public-private partnerships to improve local infrastructure and quality of life for consumers
  • Partner with microfinance companies to offer bundled services 
  • Ensure applications and claims forms are simplified and accessible to consumers
  • Use technology (mobile point-of-sale devices, smart cards) to overcome distribution challenges
“The low-income market has massive potential if insurers can adequately address consumers’ specific needs.  Low-income consumers demand high-quality products, and offering a cheap substitute will simply not work,” said Thiemo Rehländer, Head of Arthur D. Little’s Financial Services Practice, Central and Eastern Europe. “To thrive in this market, insurers must begin to think differently.  The financial services industry is in the midst of a much larger paradigm shift, so now is the time to think and act strategically in order to develop the innovative insurance products necessary to harness the potential of this emerging global market.”
“Emerging markets in microinsurance” is now available for download at

Notes for Editors

About Arthur D. Little 
Arthur D. Little, founded in 1886, is a global leader in management consultancy, linking strategy, innovation and technology with deep industry knowledge. We offer our clients sustainable solutions to their most complex business problems. Arthur D. Little has a collaborative client engagement style, exceptional people and a firm-wide commitment to quality and integrity. The firm has over 30 offices worldwide. With its partner Altran Technologies, Arthur D. Little has access to a network of over 16,000 professionals. Arthur D. Little is proud to serve many of the Fortune 100 companies globally, in addition to many other leading firms and public sector organizations.  For further information please visit

Further Information

Sue Glanville/ Maita Soukup
Say Communications
Tel: +44 (0)208 971 6423 / 6421