Michael McCord is a Principal and Managing Director at the MicroInsurance Centre in Milliman's Appleton, WI office. With over 25 years in the industry, Michael saw a growing demand for insurance for low-income individuals, but very few resources to support them. This market is vastly underserved because their needs are different. When thinking about how to service this demographic, the insurance industry needs to take on a complete paradigm shift. Michael explains why in this week's episode.

Key Takeaways

• A little bit about Michael and what he does for Milliman.
• Very quickly, Michael realized that when low-income people did better and started moving up the ladder, a small disaster would occur, and they were right back on the breadline.
• When Michael, who has spent time throughout Africa, went to suggest the concept of insurance to help the people of Uganda, his idea was rejected.
• Michael has spoken to different types of executives in this field, the reason why so many companies target the "upper market" is because they don't know how to access this lower-margin market and help more people.
• How do you define microinsurance?
• Selling insurance to low-income people has a lot of moving pieces. This means you have to be on the ground and talking to people to really understand their unique challenges.
• Michael lists some of the challenges with serving this particular market segment.
• There are four pillars to making microinsurance successful. Michael shares a bit of back story as to why.
• The reality is, there isn't enough money in these policies. The margins are low, but you make up for it in volume.
• Is there more of an acceptance from regulators on the need for microinsurance?
• Michael shares an example of why a freemium model doesn't work in this space.
• Michael breaks down how the insurance industry has to think differently for this demographic by sharing some common challenges people are running into, and how microinsurance helps fill that gap.
• Michael is doing a women's risk insurance profile in Kenya. He shares some of his insights so far.
• Climate change is a real problem. Michael is seeing first-hand the impacts of it and the people who deeply depend on agriculture to survive.
• What does Michael wish he'd known about at the beginning of his career?

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Michael on LinkedIn

Quotes

"Microinsurance is specifically designed for low-income people. This is an active piece of the insurance continuum."

"We're going to do a $500 policy for low-income people. How do we operationally do that differently? It's a paradigm shift. Low-income people need money within hours, [not days/weeks]."

"We have to define microinsurance with regulators, how to distribute it, who can distribute it, what technology they can use. We need to get all four of those pieces and if we don't do a piece of that, then it will always fail."