BIMA, a mobile insurance startup based in Sweden, has signed up 24 million customers in Asia, Africa, and Latin America, according to one of its officials. These are considered emerging markets for the insurance industry.
The company offers microinsurance, which allows people to obtain accident or life insurance for as low as US$0.60 a day, with a payout of US$1,000 in case of the insured’s death. Signing up for cover takes just three minutes, and payments are collected via customer’s mobile phones through tie-ups with telecoms providers.
According to Mathilda Strom, deputy CEO of BIMA, the company’s main advantage is harnessing the high level of mobile penetration in its target markets. Over nine in 10 of the company’s customers earn less than US$10 daily, while 54% live on less than US$2.50 per day. However, these customers often top up their mobile phone accounts. BIMA taps into this constant trickle of revenue to provide insurance to consumers. At present, the firm’s largest market is Bangladesh, where it has 9 million customers.
Strom told the Business Insider
: “Some people think there's a cultural reason why these people don't get insurance but it's really because people haven't been able to profitably offer insurance to the mass market.”
Insurers may think that low-end markets are not profitable, but BIMA has showed the opposite. It has turned a profit in Ghana and some other markets, while it is working to fine-tune its risk profile in others.
BIMA has just 15 employees spread over its London and Stockholm offices, but it has a network of 3,500 sales agents present in 16 markets in Africa, Asia, and Latin America.
Strom related: “The questions people ask can be odd. I tried to sell insurance in Uganda and the guy asked what happens if I don't die? When do I get the money back? How can you use those questions with tech? You can't.”
“All insurers are trying to do this,” she added. “The most important thing is distribution. They assume digital will take care of everything.”
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