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Ad-hoc consumer education is a waste of money

Emerging Insight #:


Date of Release:

  November 2, 2010


  Consumer education


  South African Insurance Association (SAIA) & CARE India and Bajaj AllianzCooperative Insurance Company, Kenya

A long-term, comprehensive approach is important to develop and deliver effective consumer education to improve risk-management capacities of low-income households. Careful identification of topics crucial to develop insurance and product awareness is required, along with ongoing use of consistent, integrated messages delivered by multiple channels.

The experience of SAIA provides a useful reminder of why one-time activities are not an effective way to build insurance culture. As part of a broader consumer education initiative, SAIA supported a project that provided financial literacy through a series of well-designed one-day workshops in rural areas. After one year SAIA found that only 57% of the participants interviewed ever remembered participating in the workshop.  According to staff, one of the main reasons for the poor recall rate was that the education was delivered in a stand-alone workshop rather than a continuous learning process facilitated by refresher messages in various forms and integrated with access to microinsurance products.   

On a similar note, in partnership with Bajaj Allianz, CARE India found that certain topics, such as risk pooling and claims procedures, need continuous emphasis and repetition. In terms of product education, CARE India also reported that explaining the value of life insurance was more difficult than for other kinds of insurance, because life insurance does not offer a tangible benefit to the policyholder. Additional focus on how life insurance helps beneficiaries was required.   For more on consumer education, click here.