I am a fan of Clayton Christensen’s work and it’s no secret that I take inspiration from his and his coauthors’ books in my effort of making insurance easy, affordable, available and accessible for non-consumers.
While rereading his work “Competing Against Luck” and the brilliantly explained Jobs Theory, I could not resist drawing parallels between the insurance in emerging markets and why it is not sought after as much as other consumer products.
First, as per Jobs Theory, customers “hire” products or services to do certain jobs. One would hire insurance to do the job of paying, reasonably quickly, when they fall sick or lose their phones or break windshield of their cars. Second, citing the book, in getting the job done for customers looking for something to keep their long commute interesting, our protagonist milkshake brand had competition from unthought-of products like bananas, coffee, juices, bagels etc. as opposed to other chains of milkshake. Insurance too faces competition, and in the context of emerging customers, it is almost always not from other insurance brands but from nothing or no-insurance.
If milkshake failed to do the job it was hired for, customers were likely to move to the competition. Similarly, if insurance fails (or has the common perception that it fails) to do the job customers hire it for, it will eventually drive them to the competition i.e. no-insurance and that often reflects in low insurance penetration in our markets.
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Clayton Christensen Institute Taddy Hall Karen Dillon David Duncan
Instaful Solutions