For insurers worldwide, microinsurance has long been a fast-growing market: the total number of customers in this market was 76 million in 2010, and by 2013 that figure had risen to 260 million.

        For developing countries, where overall welfare systems are inadequate and traditional commercial insurance is generally expensive, microinsurance is a good option for low-income groups in these emerging markets.

        Recently, BIMA, a Swedish insurance startup, announced a US$16.8 million Series D funding round from AXIATA Digital, a subsidiary of Malaysian telecom giant Axiata Group Berhad.

        Founded in 2010, BIMA is a startup that mainly provides "microinsurance" services to low-income families in emerging markets. They partner with local insurers to deliver insurance and mobile health services, and support quick mobile-based inquiries, purchases and premium payments. For example, they partnered with Cambodia's SMART insurance company to offer ultra-low-coverage life insurance locally—reportedly with premiums as low as US$0.03 per day.

        Southeast Asia has many developing countries, so from the perspective of time and cost efficiency, the microinsurance-plus-mobile solution is likely the most widely accepted and lowest-cost approach. Previously, Southeast Asian insurtech company Democrance bundled mobile phone data plans with microinsurance, achieving good results in the Middle East and North Africa.

        For insurers, microinsurance has low ticket sizes and a small market size, making it less attractive to an industry that prefers high-value policies. However, some industry insiders believe that users who buy microinsurance products online are actually quality customers with insurance awareness and willingness, holding great potential value that can be tapped in the future.

        Of course, for companies focused on microinsurance, selling these products profitably requires greater efficiency in policy administration—relying on insurers' mobile apps, fintech systems and other digital innovations to quantify risk more precisely while using technology to drive down operating costs.

        After this funding round, BIMA's total funding has reached US$75 million. To date, its business serves 27 million users across 16 countries, mainly in Asia, Africa and Latin America, such as Ghana, Tanzania, Mauritius, Sri Lanka, Indonesia and Honduras.

Source: 36Kr