Abstract

When distribution is neglected, micro insurance fails. This considered, the objective of this study was twofold – to explore the nature of micro insurance distribution channels and to understand the distribution strategy of a commercial insurance company in Swaziland. Using interviews with the senior managers of a commercial insurer and its distribution partners, this study generated in-depth qualitative data on their experience and recollections of the nature of channels and the strategy of distributing micro insurance. In this study, the commercial insurer leveraged predominantly on non-traditional channels such as churches, post offices, and cooperatives. These are characterised by access to large groups of potential clients and the trust of the community – but were initially incapacitated by a lack of technical expertise in terms of being trusted business associates and trusted advisors to micro insurance clients in Swaziland. Four inextricable components – depicting novel partnerships, ease of doing business, channel communication, and bringing micro insurance close to the people – encapsulate the distribution strategy of the commercial insurer. Among the key imperatives for cost-effective distribution of micro insurance are tailored channel development, consumer education, and segmentation of non-traditional channels to match low-income clients. Given the findings, a simple framework of micro insurance distribution and implications for research are proposed.

Key words: Micro insurance distribution, distribution strategy, service distribution.