Page 31 - The Insurance Times April 2025

2. Trust Building and Social Capital tatives in governance has ensured transparency,
Trust is crucial in insurance uptake, especially in com- affordability, and accountability.
munities that have historically been excluded from for-
mal financial services. CBOs, being familiar and trusted Challenges Faced by Community-Based Insur-
institutions within the community, help build confidence ance Models
in insurance providers. Their involvement lends credibil-
Despite their potential, CBO-led insurance initiatives face
ity to insurance schemes and reduces skepticism.
several challenges:
3. Customized Product Design Limited Technical Capacity: Many CBOs lack actuarial
CBOs have deep insights into the socio-economic reali- expertise, data management systems, and risk assess-
ties, preferences, and risk profiles of their communities. ment tools.
By collaborating with insurers, they can help in co-de- Sustainability Concerns: Without adequate funding or
signing insurance products that are culturally appropri- partnerships with formal insurers, community-based
ate, need-based, and easy to understand. This partici- schemes may struggle to remain financially viable.
patory approach enhances product relevance and up- Regulatory Barriers: In some countries, community in-
take. surance models are not well recognized within regula-
tory frameworks, limiting their ability to scale.
4. Premium Collection and Claims Processing
Claims Management Complexities: Ensuring timely and
Due to their established structures and networks, CBOs fair claims settlement remains a persistent challenge
can act as intermediaries in premium collection and due to logistical and procedural hurdles.
claims disbursement. This localized management reduces
transaction costs and ensures timely service delivery. Policy and Partnership Recommendations
They also assist in claims documentation and grievance
1. Capacity Building: Governments, donors, and insurers
redressal, thereby improving the customer experience.
should invest in training CBOs on insurance principles,
5. Monitoring and Feedback Mechanisms technology usage, and data analytics.
CBOs serve as effective feedback channels between the
2. Public-Private Partnerships: Insurers should view CBOs
insured and the insurers. They can track coverage effec-
as strategic partners and collaborate on product devel-
tiveness, report service issues, and suggest product modi-
opment, risk-sharing, and capacity enhancement.
fications. This continuous feedback loop enables insurers
to adapt and improve their offerings in real time. 3. Regulatory Support: Policymakers must recognize
community-based models within insurance regulations,
Case Studies: Effectiveness in Action providing frameworks that ensure consumer protection
without stifling innovation.
a) SEWA in India
4. Digital Inclusion: Leveraging mobile technology and
The Self-Employed Women's Association (SEWA) in In-
dia has been a pioneer in providing microinsurance to digital platforms can help CBOs reduce administrative
women working in the informal sector. Through SEWA's burdens and enhance service delivery.
insurance arm, VimoSEWA, members receive access to
health, life, and asset insurance. SEWA's community- Conclusion
centric model has resulted in high renewal rates and Community-based organizations are indispensable to the
strong member loyalty. Their integrated approach of mission of making insurance truly inclusive. Their grassroots
financial education, product bundling, and claims sup- reach, social trust, and deep local knowledge position them
port showcases the power of CBOs in scaling inclusive uniquely to serve as bridges between formal insurers and
insurance. underserved communities. When empowered with the right
b) CBHI in Rwanda tools, partnerships, and policy support, CBOs can transform
the insurance landscape by enabling equitable access to fi-
Rwanda's Community-Based Health Insurance (CBHI)
model has achieved over 90% health insurance cover- nancial protection for all. As the world moves toward more
age. Managed at the district level by local cooperatives resilient and inclusive financial systems, integrating CBOs
and supported by government subsidies, the scheme into insurance ecosystems will be key to reaching the last
mile and leaving no one behind.
has significantly improved healthcare access and finan-
cial security. The involvement of community represen- - The Insurance Times Research Team

The Insurance Times April 2025 29