Building a strong community, one enterprise at a time

Micro insurance refers to insurance services predominantly targeting low-income earners, who are excluded from the more formal commercial and social insurance schemes, due to affordability barriers. Micro Health Insurance (MHI) improves access to health services and offers financial risk protection through a reduction in out of pocket expenditures.

In Kenya, insurance is often unavailable to those who need it most. More than one-third or 36 percent of Kenyans are exposed to numerous risks such as economic shocks, death, illness and loss of property due to natural disasters and calamities.

Events such as a death, disability, or even sickness in the family can wipe out any savings they might have accumulated, pushing them and their families deeper into financial instability. Therefore it is extremely important to bring them affordable and accessible low cost insurance products to help them through such difficult and trying situations.

Fortunately, technological innovations in digital financial services have made it easier to combine insurance with other financial products in ways that address a range of probable risk for the low income segment, when they need it the most.

Meet John Paul Otieno, Chief Executive Officer of ‎Insurance For All (IFA) Insurance agency, provider of the Afya Poa MHI scheme, an innovative health-financing product that will enable people in the informal sectors to manage health-related risks. It provides a financial platform that organizes their limited resources to ensure that they will always have access to quality healthcare whenever they need it.

Afya Poa is also one of PesaKit’s MHI super partners, providing PesaKit customers with an in & outpatient benefit that helps them through any medical emergencies. We sat down with him as part of our “Partnerships with a Purpose” series, to talk about driving digital inclusion and innovation through digital centers.

Please tell us a little about yourself and your role.

I am a seasoned marketer and strategist with over 20 years experience in the insurance industry. I am one of the co-founders and currently the CEO of Insurance for All (IFA).

Give us a bit of background on Afya Poa and what it does.

Insurance for All (IFA) is a licensed Insurance Agency founded in the year 2014. The firm is focused on providing relevant and affordable insurance products to Kenyan Workers in the low income segment. AfyaPoa is our flagship product. It offers several benefits for the family unit including In & Outpatient cover, hospital cash, funeral and property covers.

What are some of the challenges you face in your daily operations?

I believe the biggest challenge for us has always been how to win the trust of those in our target market and get them to buy our products. This is mainly because we are a new brand, selling a product that they have never consumed before.

Health insurance is the most effective way for people to reduce their out-of-pocket costs and avoid having a major medical emergency plunge them into poverty. However, insurance providers often have difficulty convincing low-income customers to pay insurance premiums now for needs that may or may not arise later.

Things are made worse by the negative perception created by industry players in the past that insurance does not pay out at the time of need.

PesaKit subscribers are more likely to trust us and our products based on PesaKit’s recommendation. This is because of their already existing strong relationship.

Tell us about your partnership with PesaKit and how it has helped

We have partnered with PesaKit to provide AfyaPoa insurance to M-Pesa agents who have subscribed to their services. M-Pesa agents registered with PesaKit can purchase the different kinds of policies that AfyaPoa offers directly from the PesaKit app and pay the respective premiums directly on the app as well. The agent has the option to pick up a premium loan and pay this off over 10 months.

We started this partnership as we felt PesaKit’s unique products to serve M-Pesa agents across Kenya aligned with our own brand of unique micro-health solutions for the underserved communities of the country.

What kind of support do micro-financiers need to better help the community?

The laws in this country require that insurance premiums be paid in full and upfront to the insurance company before the cover commences. This law has created a barrier for those in the low-income segment when it comes to them accessing cover. Most of them simply cannot afford to raise the full premium, upfront as required. There is also a need for public policy interventions to stimulate the insurance sector. Among other initiatives, this can include conducive regulations and government spending to insure vulnerable groups of the society.

It is my hope that micro-financiers will create specific loan products to finance premiums allowing for flexible payments over a period of time. We are working with PesaKit to make this a reality, aligning our mission to create an inclusive world and providing our customers value in the medium and long-term.

It is evident that digital channels have an important role to play for insurance providers looking to create microinsurance products that will address a broader range of issues and add credible value to customer’s lives. Afya Poa is such an example of how providers can approach health insurance for the underserved communities of society.

Businesses can gain infinitely more when they choose to participate in strategic partnerships. No matter how successful your business is, the right partnership can take it to even greater heights. Whatever your business is, it is important to look for the right partnership agreement that benefits both parties. At PesaKit, we strive to build such relationships with like minded businesses that are, at the heart, working tirelessly to build an inclusive nation.