The insurance industry has grown from covering mercantile operations over 300 years ago to a U.S. $4.65 trillion behemoth that is integrated with many aspects of our lives. Whether we wish to insure our investment in a home or a car, prepare for an emergency, or gain healthcare coverage, various forms of insurance cover risk and provide peace of mind.

However, despite the industry’s incredible growth, there are still four billion people, approximately 55% of the world’s population, who remain uninsured in one form or another. In the language of Disruptive Innovation theory, this population set represents nonconsumption—the inability of an entity (person or organization) to purchase and use (consume) a solution because of constraints. Generally, these constraints are skill, time, access, and wealth.

In the case of insurance, one barrier preventing people from obtaining it is education. Many people do not realize the value of insurance and how it can help them make progress in their lives. Some individuals simply can’t afford it, while others don’t have the skill or time to navigate the array of complex policy offerings. These constraints help explain why in California, a state plagued by earthquakes, a mere 17% of households carry earthquake insurance, despite the obvious risks.

Whatever the reason, nonconsumption is often a fertile breeding ground for disruptive entrants to emerge in an industry. By targeting nonconsumers with simple, affordable, and accessible solutions, disruptive entrants can emerge victorious against incumbent companies who often ignore customers that appear less attractive.

To that end, there are a few entrants targeting insurance nonconsumers, presenting these firms with an open runway for improvement. While time will tell if these players can maintain low-cost business models as they serve ever more demanding customers, the foothold they’re building among nonconsumers is worth a closer look.

In several countries throughout Africa, large incumbent insurance carriers simply don’t operate. Their existing cost structures limit their ability to serve markets that fetch low premiums from low-income segments. It’s in these markets that entrants such as BIMA are introducing insurance products to those primarily living in poverty.

More than half of BIMA’s customers live on less than $2.50 per day and 93% live on less than $10 per day, so it’s no surprise why 75% of the insurers customers were unable to purchase insurance prior to BIMA. To reach them, BIMA has partnered with mobile operators who’ve already built relationships with these potential customers.

It works like this: BIMA targets individuals who already have mobile plans, essentially piggy-backing off of the trust that has been built between customers and their mobile operators. Should customers wish to purchase a policy, the cost is simply deducted from their existing mobile plans’ airtime balance—no extra paperwork needed.

Another entrant that is reducing access and wealth barriers is U.K. based Bought by Many. For high-risk segments of the population it can be a challenge to gain access to affordable insurance. Bought by Many is trying to help. Rather than shy away from these individuals, the insurer is deliberately focusing on markets that are underserved by large incumbent carriers, either because they are high risk, or because they are niche.

To identify these groups, Bought by Many taps into Google search data to discover which groups have high volumes of search queries for specialized insurance products. People can also submit their own requests for unique policies (I want to insure my rare breed of dog) through the data entry box on its website. Bought by Many then validates those segments by engaging with social media, niche blogs, Facebook groups and other stakeholders. When the group is large enough, the platform identifies existing tailored insurance products offered by carriers or it works with carriers to design new policies for these niche groups.

Regardless of our background, we all face innumerable risks. There’s the risk of getting sick and not being able to work. The risk of spilling coffee on our laptop. The risk of being robbed, and the risk of a flood wiping out our home. By targeting nonconsumption, these entrants are providing vulnerable communities with financial cover and protection for the unforeseeable risks we encounter in our lives.

By removing barriers to insurance consumption, these entrants also stand to create new markets with limited competition, as opposed to becoming a commodity in existing markets. It remains to be seen if they can scale and move upmarket after gaining a foothold among nonconsumers. But with millions of uninsured around the world, opportunity for growth is everywhere.


  • Parthasarathi Varatharajan
    Parthasarathi Varatharajan