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Hope for the Best, Plan for the Worst: Developing Embedded Micro Insurance Products for Life’s Unexpected Events

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Life is great when it’s going smoothly. But as is the way with life, obstacles can appear that throw us off course – and we don’t always see them coming.

This uncertainty is the reason why insurance and companies such as MIC Global exist. It’s not pleasant to have to think about what can go wrong – we all want the best in life and to get by unimpeded – but by considering what worst cases can happen to us and investing in appropriate protections, we can be in a better position should we find ourselves in such circumstances.

So, how do these protection products come about? At MIC Global, we keep track of trends and emerging risks in order to innovate with new products and partners – making relevant insurances available to people so that they can quickly recover when faced with adversity.

In today’s article we explore three news stories from this year and what products we have developed that can support individuals who find themselves in similar situations:

Note: The embedded micro insurance products discussed below are not offered to end-customers directly by MIC Global. We provide our digital reinsurance products to local insurance partners, which support our platform and service partners’ own insurance offerings.

Involuntary Unemployment: Safeguarding Livelihoods Amidst Uncertainty

According to Forbes’ 2023 Layoff Tracker, the US has already seen around 230,000 job cuts this year – and that’s just the big, noteworthy companies. The number is likely higher given the huge number of small and medium businesses. Fifteen-year high interest rates, above average inflation, and trading in a post-pandemic economy has forced many companies to make difficult decisions to stay afloat.

With much of the workforce unable to cover a $500 emergency, an unexpected layoff can put individuals and families in an extremely vulnerable position, potentially unable to pay their essential bills and expenses. This is worrying at the best of times, but with rising household bills, mortgages, and rental fees, people are more reliant than ever on not losing their jobs.

How is MIC protecting against involuntary unemployment?

Our MiIncome product suite has been designed to protect people’s personal incomes in the face of adversity. The ‘Layoff’ trigger has been specifically written to support individuals who become laid off through no fault of their own.

When laid off, an insured individual can raise a claim to receive cash payments straight to their bank account, which helps cover their essential costs of living while they find themselves a new job or income stream.

A recent example of this is our partnership with Grid, a leading US neo-bank. Grid offer their Income Protection program to their customers, which includes embedded micro insurance supplied by MIC Global (as digital reinsurance via The Plateau Group). When receiving involuntary unemployment, customers can inform Grid of their new situation and receive $2,000 payments for up to two months, so that they can focus on finding a new job with less financial burden.

Job loss is a very real threat to people’s incomes and livelihoods and depending on individual financial wellbeing, it can be crippling. Insured customers with MiIncome coverage can plan ahead knowing that they will have cash in their pockets should the worst happen to their job.

Smart Phone Damage: When Life Happens to Devices

In 2023, according to Statista, smart phone adoption globally has reached a staggering 6.92 billion users, or 85.95% of the world’s population, as reported by Bankcell. This inevitably leads countless damaged smart phones every year. A survey of 3,286 Americans by AT&T, as reported by Forbes, revealed that three quarters of adults aged 19–44 have broken a smart phone at some point – the top five reasons could happen to anybody!

Smart phones have become so engrained in life that for some, their livelihoods rely on having an operational device – for example ride-share drivers who work via apps to pick up jobs and communicate with customers. Losing use of a smart phone can take a real toll on people’s ability to earn if they are unable to replace quickly. For others, a shattered screen may not lead to financial hardship, but it is still an inconvenience that hits their bank account that they could do without.

How is MIC protecting against smart phone damage?

We understand how frustrating a broken smart phone can be – we’ve all been there! We created our MiIncident product suite to handle life’s daily disruptions, including smart phone damage. The ‘Gadget’ trigger is purpose built to look after individual’s smart phones – as well as a whole host of other tech products – from component damage, mechanical breakdown, and theft.

We work with our partners to develop warranty products that can be offered to their customers as part of the purchase of their smart phone. In April 2023, we launched our partnership with Turkish cell phone renewal center Garantili Teknologi and Swiss insurtech Virtual i Technologies, in support of their innovative embedded warranty product. In the event of smart phone damage, insured Garantili customers can diagnose and verify damage via an AI-powered app before making a claim. This speeds up the claim process and puts claim payments in customer pockets fast so that they can choose to repair their device via Garantili’s refurbishment center or replace their device.

Smart phone users insured through a platform offering a warranty solution backed by MiIncident can receive quick payments* to mitigate financial burden, so they can get their devices repaired and back in their hands with low disruption, meaning that those who are reliant on their smart phone avoid the worst-case scenario of being without their device for too long. Furthermore, it was predicted that 5.3 billion mobile phones became waste in 2022 alone, so having coverage to repair devices helps people do their part for the environment by using devices for longer and reducing e-waste.

Identity Theft: Guarding Digital Identities

A data breach in October 2022 was alleged to have exposed the personal information of Australian Sarah Luke to the Dark Web. Her information was picked up by hackers and became involved in a credential stuffing cyber-attack launched at Paypal in December 2022, as one of around 35,000 accounts used. Hackers gained access to her Paypal account and committed hundreds of fraudulent transactions before she was able to regain control. She has since been ordered by US courts to pay US$1.2M to Adidas and the National Basketball Association (NBA) due to sale of counterfeit goods in her name. Ms Luke is now trying to clear her name through the relevant authorities.

Data breaches and stolen personal information are an ever-present threat for companies and individuals, becoming increasingly prevalent as companies go digital. Thankfully for most, stories of the severity described above are not common – but that’s not to say that personal information leaked to the Dark Web isn’t a serious concern.

How is MIC protecting against identity theft?

We have developed the MiIdentity ‘Digital Identity’ trigger, which is coupled with our MiIdentity platform. Together, individuals are assisted with identity tracking, restoration, and money loss.

Identity restoration claims are activated when two events occur: an individual’s identity is stolen and is subsequently used in fraudulent activity. We support people to reclaim their identities with inconvenience payments that help to replace documentation, bank cards, and personal IDs, and to restore their credit history. Furthermore, in the event of monetary loss from a financial account caught up in the identity restoration claim, we offer lump sum payments to help people recover from lost funds.

Considering the example above, if enrolled with our MiIdentity coverage Ms Luke and the other affected account holders would have been made aware of these possibilities and alerted when our monitoring service discovered their data listed on the Dark Web. Knowing your information is on the Dark Web and potentially for sale is just the first step in protecting your identity. Our MiIdentity service enables individuals to take measures to protect their accounts, to be aware of their compromised accounts, and receive financial support to regain control where necessary. This can help to avoid personal accounts being used by malicious actors for fraudulent activities which, as seen here, could spiral into international legal proceedings – a prime example of ‘what’s the worst that could happen?’

Contact us to see how an embedded micro insurance solution from MIC Global can help your business protect its customers from their own worst-case scenario.

* 80% of claims turned around within 48 hours, May–Dec 2023.