Last week’s Database at a Glance: Kenya Part 1 focused on how programs in Kenya are utilizing information communication technologies through mobile phones to improve access to health services. This week, in Part 2 of our 3 part series, we’re looking at how Kenyan programs profiled in the CHMI database are using insurance to prevent health related financial catastrophes.
Developing micro- and community based insurance schemes and public sector insurance innovations to shield low income populations from health-related bankruptcy
Low-income populations are more vulnerable to risk because of their lack of financial means to absorb negative shocks to income or assets. To help mitigate that risk, both the public and private sector in Kenya are developing a wide variety of innovative micro- and community based insurance schemes that can shield these populations from financial ruin should a health crisis arise. There are 32 programs in Kenya focused on financing care in the CHMI database, 16 of which are creating micro- and community-based insurance schemes.
The National Hospital Insurance Fund (NHIF), the primary provider of health insurance in Kenya with a mandate to enable Kenyans to access quality and affordable health services, has recently launched a new insurance cover to cater for those working in the informal sector. The new NHIF cover will cost each family Sh160 per month and will cover the contributor, one spouse and unlimited number of children. NHIF has launched a nationwide recruitment campaign to target over 10 million eligible informal sector workers to help realize their goal of universal health coverage.
The private sector is also developing innovative insurance models. For example, the Co-operative Insurance Company of Kenya Limited (CIC) has launched a number of micro-insurance products targeted at lowest income groups, using mobile phone platforms, and a micro-health insurance package for vendors and other informal sector workers. Funded through investor capital, the M-BIMA program is part of CIC’s effort to establish effective ways to reduce distribution and management costs of micro-insurance to ensure sustainability.
M-BIMA is an insurance premium payment instrument that rides on mobile money transfer platforms such as M-Pesa, Yu-Cash, and Airtel’s Zap/Airtel Money. Policy holders including health insurance can remit as little as KES20 (approximately USD $25) premium payment through their cell phones free of charge. Clients also get regular SMS updates on their policies. M-BIMA is one of the solutions to the challenges involved in penetrating the low-income market and developing cost-efficient insurance distribution and payment mechanisms.
MicroEnsure is an insurance intermediary dedicated to serving the poor with an affordable and appropriate range of insurance products. To understand consumer needs, MicroEnsure works in partnership with microfinance organizations, rural banks, faith-based networks, and Savings and Credit Co-operatives (SACCOs). The company uses a sophisticated MIS system in its back office processing that tracks details of clients covered, collects premiums, and administers claims.
MicroEnsure also negotiates with insurance companies on behalf of their clients to keep premiums to a minimum. Following an 88% increase in the number of clients served in the past five months, MicroEnsure now covers more than 7.6million people across Africa and Asia with a range of accessible insurance products including life, health, personal accident and property.
Through MicroEnsure’s partnerships with mobile network operators and microfinance banks, the company expects to enter three new countries, reaching 12.7million clients by the end of 2014. It has raised $10.4m from its existing investors, and has secured new investment from Sanlam Emerging Markets and AXA, to help finance its rapid continued expansion into new markets.
Be sure to follow next week’s Database at a Glance: Kenya Part 3, as CHMI’s Komal Bazaz-Smith explores how health service networks in Kenya are reducing fragmentation of healthcare delivery.