Microfinance Focus, December 22, 2011: The latest emerging insight from ILO’s Microinsurance Facility says that purchase decision for microinsurance products is influenced by communities.

Based on its market experience, Old Mutual, an insurance provider in South Africa has divided its low income consumers into two segments: an individually-motivated consumer and a community-motivated consumer.

While an individually-motivated consumer is comfortable deciding to purchase insurance alone, community-motivated consumers rely on community input before making a final purchase decision.

Old Mutual reaches its community-motivated consumers with targeted products and marketing. Its funeral insurance products, for example, are sold through affinity-based and community-based groups such as religious, savings, and social development project groups.

To expand community outreach, Old Mutual is present in village-based retail outlets for financial services called “Greenshops”. A physical presence in the community through these one-stop shops is anticipated to increase sales by leveraging the influence of the community on consumers to purchase insurance.