Page 51 - The Insurance Times May 2025

Digital Identity for Microinsurance and Kenya's M-PESA and M-TIBA Platforms: These plat-
forms use mobile-based digital identity and payment
Rural Coverage systems to offer health insurance and savings products

Digital identity systems are particularly beneficial in promot- to low-income populations.
ing microinsurance in rural and remote regions. Here's how:
Pakistan's National Database & Registration Author-
1. Remote Onboarding: Using mobile-based identity veri- ity (NADRA): The government works with insurers to
fication, insurers can onboard customers in the most re- provide flood and livestock insurance, using NADRA's da-
mote locations without the need for physical paperwork.
tabase for targeting and verification.
2. Efficient Claims Processing: Claims can be validated us- UNDP and UNCDF Programs: These organizations are
ing biometric or digital records, reducing the chances
piloting blockchain-based identity systems in develop-
of fraud and speeding up disbursement.
ing countries to support disaster risk financing and para-
3. Gender Inclusion: Women in rural areas often lack metric insurance.
physical documentation. Digital IDs can empower them
to become policyholders in their own right. The Way Forward
4. Integration with Government Programs: Linking insur- To harness the full potential of digital identity in inclusive
ance with public welfare schemes ensures wider and insurance, collaboration is essential. Insurers, technology
faster reach, especially during disasters or health emer- providers, regulators, and government agencies must work
gencies. together to:
Develop interoperable identity systems that work across
Challenges and Considerations platforms
While digital identity offers numerous benefits, there are Build user-friendly apps and services that accommodate
also challenges that must be addressed to ensure equity and low-literacy users
security:
Implement robust data protection frameworks
Digital Literacy: Many in underserved communities may
lack the skills to use digital platforms. Insurance com- Provide digital skills training to marginalized groups
panies must invest in education and support. Promote public awareness campaigns around digital

Data Privacy and Security: Handling biometric and inclusion
personal data requires strict adherence to privacy laws
and cybersecurity protocols. Any breach can undermine Conclusion

trust and have serious consequences. Digital identity is more than just a technological innovation-
Infrastructure Gaps: In many regions, poor internet it is a powerful tool for social and economic inclusion. When
connectivity and lack of access to smartphones limit the leveraged responsibly, it can unlock access to insurance for
effectiveness of digital identity-based services. millions who have long remained excluded. By removing
barriers such as documentation requirements, enabling
Exclusion Risks: Poor biometric capture, errors in data
mobile access, and integrating with government programs,
entry, or authentication failures can exclude genuine digital identity can make inclusive insurance not just a policy
beneficiaries. Hence, manual fallback options should be goal, but a tangible reality.
available.

In the coming years, the fusion of digital identity with inclu-
Global Perspective and Innovations sive insurance will play a pivotal role in building resilient
Other countries are also leveraging digital identity to im- communities, fostering financial security, and ensuring that
prove insurance access: no one is left behind in the digital economy.

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The Insurance Times May 2025 47