MILK Brief #32: Colombian life microinsurance - The business case for Solidaria's distribution partners

As a follow up to our study of life microinsurance in Colombia (MILK Brief 21 – Colombian life microinsurance: an emerging success story) the Microinsurance Centre’s MILK team returns to this intriguing market to study the business case for life microinsurance at various stages of the value chain. Our analysis focuses on Solidaria and its distributors, all cooperative institutions in Medellin, which distribute credit and group life products.

We found that Solidaria had robust profitability on two of its three partnerships; the third was terminating, requiring run off reserves which made it somewhat unprofitable. For the distribution partners, each made solid profit margins. However, it is not clear how material these profits are relative to the scale of the distributors’ overall businesses, and therefore Solidaria must rely on other intangible benefits to support the business case for its partners.