A year after it announcing a global initiative to better protect the middle class in emerging markets, the AXA Group is accelerating this development in India by partnering with Airtel Payments Bank, the mobile banking arm of the country’s leading telecom player, Airtel. AXA will offer insurance services specifically designed for this customer segment, which continues to be largely underserved, with the aim to insure 20 million people by the end of the first year.
Recently authorized with the support of Prime Minister Narendra Modi, payments banks contribute to India’s ambition to go “100% digital” by offering smartphone-enabled financial services – payments, savings, insurance, money transfers – to people without a bank account. This is a huge feat for the only country in the world where Uber allows riders to pay in cash and where 95% of transactions are made using banknotes, but half of all phones sold are smartphones.
The partnership between AXA and Airtel Payments Bank is making it possible for Airtel Payments Bank to offer personal accident coverage of up to 100,000 rupees (about 1,300 euros) to its new customers. Such insurance is often first-ever formal protection available to emerging customers, providing a first line of protection against a return to financial insecurity. In India, fewer than 10% of the population has access to insurance, and 40 million people fall below the poverty line each year, due to a health-related accident.
The program draws on the product expertise and operational capacity of MicroEnsure , a specialist in insurance for emerging customers in Africa and Asia, of which AXA is the principal shareholder.
To protect the emerging middle class, the immense majority of whom have never had access to insurance, we must reinvent our approach. This means very simple products, with few or no conditions or exclusions, and a customer path made very easy using mobile technologies. This partnership with Airtel Payments Bank is a fantastic example of the potential brought by the digital revolution, allowing us to push back the limits of insurability and protect millions of people who were unreachable only a few years ago!
Airtel Payments Bank was the first to enter this market, launching in November 2016 in Rajasthan before spreading to the rest of the country in mid-January. Buoyed by the government’s demonetization of 500- and 1000-rupee bank notes (equivalent to about 8 and 16 euros, respectively) in the fight against fraud, the bank has grown at breakneck pace. Digital payments are soaring in India, even among small businesses, which form the core of the Indian economy.
With its 1 million customers already, in under two months, for the insurance offer by Airtel Payments Bank and Bharti-AXA, a real success seems to be in store for this pioneering product and others to come, helping the emerging middle classes make their socioeconomic transition and protecting them from the risk of a relapse back into poverty.