MicroInsurance Services (MIS): Health insurance for the rural poor

Access to healthcare is a big challenge in rural areas of Malawi, where 86% of the country’s population lives. Public health facilities are free but often inadequate, ill equipped and stocked out of essential medicines. This forces villagers to visit private providers – if they can afford to pay out of pocket – or to delay or forgo care altogether. The result may be complications or untimely death, which for diseases like malaria can be largely avoided through prompt treatment with medicine that costs less than USD 2.

Sickness drags down the productivity of whole households as resources are diverted toward paying for healthcare and time is spent caring for the sick. In more severe cases of illness, people may resort to selling assets to pay medical bills, leading to food insecurity and chronic poverty.

MicroInsurance Services (MIS) designs and distributes micro-insurance products to rural, vulnerable populations. Its main product so far has been a bundle of credit life and health insurance sold through microfinance institutions, which automatically add it to their micro-credit loans. This set-up helps MIS access many beneficiaries while keeping user acquisition costs low.

Over the last year, MIS has launched a new consumer-targeted health and life insurance product for rural communities that, at a cost of USD 1 per month, provides fixed-amount cash payouts for malaria, childbirth, hospitalisation, accidental disability and death. This plan allows MIS to cover some of the most common health issues affecting rural communities in a way that simplifies the claims process and gives beneficiaries the flexibility to use payouts for their most pressing needs.

Targeting villages of up to 10 000 inhabitants, MIS takes a mainly community-based approach to enrolment, deploying field agents to engage local authorities (eg village chiefs) to help mobilise existing community groups such as farmer associations or to organise new groups if needed. Interested group members can enrol either directly via mobile phone or with the assistance of a field agent who instructs them to pay the premium through the nearest mobile money agent.

MIS started operating in Malawi in 2015. By the end of 2022, it counted 92 000 active micro-insurance policies (97% credit-based life and health) and 100 000 active traditional insurance policies (99% group life insurance). An estimated 80% of its micro-insurance subscribers live in rural areas. They are between 18 and 70 years old. Most have children and make their living through subsistence farming or micro-businesses. About 90% are low-income people living on less than USD 3 per day who earn meaningful amounts only during harvest time.

MIS will use the award funding to support the growth of its new direct-to-consumer health and life insurance product on the following fronts:

• Technology: To facilitate scale-up of its solution, MIS wants to strengthen its web-based platform for managing enrolments and claims by shifting from external technology providers to in-house development to gain more flexibility on the features and functionalities. It will also purchase hardware for each field agent to allow them to enrol more users and manage claims directly.

• Team: MIS plans to make new hires not only to manage the larger number of claims, but also to manage the new partnerships and to strengthen the finance team. It will also enrol more field agents to help increase sales.
• Distribution: MIS will step up innovative market development and customer engagement through educational community events and demonstrations.