Providing an Insurance Safety Net for Migrant Workers
Michal Matul is on a mission to help solve a dilemma that’s affected the quality of life for migrants and their families for generations.
As a migrant providing for your family back home, what do you do if you lose your job? What happens to you and your family if you suffer an injury on the job and aren’t able to send money home? Or, worst of all, what if you lose your life? Who will provide for your family then?
Matul believes one answer is insurance. At GMTS London, Matul will present his company’s strategic initiative to reach out to migrant workers with insurance products tailored to their needs.
“If something serious happens, migrants might resort to borrowing from a money lender or selling assets,” Matul explains. “Insurance can contribute, and transfer part of the risk so they don’t have to resort to stressful coping mechanisms.”
In his role at AXA, the French multinational insurance company, Matul is a senior advisor in a strategic initiative launched in 2016 called “Emerging Customers.” Matul has a background in financial inclusion and used that experience to help build AXA’s offering, using the microinsurance concept. Matul says AXA’s Emerging Customers initiative aims at the “missing middle,” those families who do not qualify for government help, but who are not affluent, either.
“Their main asset is life and health,” Matul says, adding that as time goes on, migrants are also able to build additional assets, often in the form of land or homes. “Later, there could be an opportunity to offer property insurance,” he adds.
But, first things first: As a way of introducing the benefits of insurance, AXA is offering migrants basic protection, including accident, life and hospitalization coverage, for an amount that totals little more than $1 a month.
“Our objective is to build insurance culture. We want to show people that insurance works,” he says. To that end, AXA Emerging Customers partners with organizations that are already trusted by migrants: money transfer operators (MTOs) and mobile network operators (MNOs).
Matul says that when partnering with MNOs, AXA arranges for the mobile company to offer the insurance free to customers who buy airtime above certain threshold in a month. The mobile operators then pay the premium to AXA on behalf of the customers.
When working with a MTO, Matul says that MNO model is applicable to boost customer acquisition and retention, while helping migrant workers discover insurance. Customers can also be given an option to buy insurance at the agent location. The teller collects the beneficiary information and the fee. Offering insurance to customers is a differentiator for MTOs, Matul says.
“It’s a powerful retention strategy,” he says. “For MTOs, offering insurance is a way to monetize the trust that they’ve built.” He adds that insurance is an emotional product, where the insured has to trust that their claim will be paid. When claims are paid, he says, it’s a boost for the MTO’s brand as well. The first level of insurance offered is to secure the migrant’s transfers – for example, if you lose your job, for the next six months, your family will have the same flow of remittances. The next level is simple health coverage for the families at home. “Migrants are often asked for extra money for hospitalizations by their families,” he says.
Matul says he feels encouraged by the first AXA deployment, which is being done in partnership with Merchantrade in Malaysia. During the three-month soft launch, as many as 10,000 migrants voluntarily bought insurance when doing their money transfers.
Matul’s vision of success is to see migrants move from unbanked, to banked, to insured and fully financially included.
“The beginning of the journey is difficult,” he acknowledges. “But once a migrant sees that someone he or she knows had a claim and it was paid, they feel differently.”
“For us, migrants are emerging customers and a gateway to the family at home,” Matul says. “Migrants today are earning 3-5 times more than ever before. They are geared to think about protection. They no longer live day by day. They’ve already started planning their finances.”
To hear more from Matul about AXA’s Emerging Customers Initiative, attend his presentation at GMTS London on 16-17 October 2018, London.