By Joyce Kabura, Principal Officer & Director, DDFinance Kenya
At DDFinance, I’ve had the privilege of leading a bold reimagination of Universal Health Coverage (UHC)—one that’s rooted in the realities of underserved communities and powered by digital innovation. Our model, Digital Life and Health Microinsurance (DLHMI), blends behavioral economics, mobile technology, and streamlined operations to deliver low-cost, high-frequency insurance to low- and middle-income households long excluded from traditional systems.
But our ambition goes beyond complementing UHC—we aim to extend its reach and deepen its impact. We want to make financial protection not just a policy goal, but a lived reality for the millions still left behind.
1. Private Sector Investment: Critical but Complex
Private sector participation is essential to DLHMI’s scalability and long-term viability. Yet, the path is not without challenges:
- How do we ensure profitability with ultra-low premiums?
- Can we scale despite high distribution costs?
- What regulatory frameworks are needed to support risk pooling and consumer protection?
Microinsurance operates on razor-thin margins. But digital innovation is helping us flip the equation—reducing costs, increasing efficiency, and unlocking new pathways to scale.
2. How We’re Advancing Sustainability
At DDFinance, we’re proving that sustainability is possible—even in low-premium environments—through:
- Real-Time Data: Enabling dynamic pricing, fraud reduction, and product personalization.
- Blended Financing: Pilots combining donor, government, and private capital—measured through KPIs like claims ratios and retention.
- Gender Inclusion: Women’s mobile ownership correlates with higher uptake, yet most products remain male-oriented. We’re changing that.
- Field Results: Our pilots show 70% renewal rates and improved maternal health outcomes—evidence that impact and viability can go hand in hand.
3. A Scalable Model: DLHMI via Lenders and Faith-Based Hospitals
One of the most promising models we’re exploring involves bundling microinsurance with loans, Care delivered through trusted faith-based hospitals (FBHs). This creates a powerful mix of financial access, healthcare delivery, digital efficiency, and community trust.
How it works:
- MFIs, cooperatives, or digital lenders offer bundled DLHMI.
- Patients access care through a network of 734 empaneled FBHs—trusted providers in underserved areas.
4. Opportunities and Risks: What We’re Learning
A. Leveraging Trust Capital
FBHs hold deep social capital in rural and religious communities. Their involvement drives enrollment, utilization, and compliance—improving both health outcomes and financial performance.
B. Distribution Efficiency
Digital lenders manage onboarding, premium financing, and deductions at source—cutting distribution costs dramatically. Bundled financial-health products consistently outperform standalone health microinsurance.
C. Financial Sustainability
Linking coverage to semi-closed hospital networks reduces fraud and moral hazard. Standardized care from FBHs leads to predictable costs and better risk management.
D. Governance Risks
Over-reliance on religious institutions could unintentionally exclude non-affiliated groups or limit services like reproductive care. We must embed safeguards to ensure equity and universality.
E. Quality of Care
FBHs often deliver holistic, ethical care—driving trust, retention, and valid claims. (Ref: WHO-World Bank, 2021: Tracking UHC: Faith-Based Participation)
F. Digital Enablement
We’re integrating e-claims, real-time verification, and health wallets. Early trials with blockchain-based smart contracts show promise in automating claims settlement.
5. Net Impact on Sustainability
| Factor | Positive Impact | Potential Risk |
|---|---|---|
| Community Trust | Higher uptake and renewal rates | Possible exclusion of non-believers |
| Cost Efficiency | Reduced fraud and lower distribution costs | Limited service diversity |
| Digital Integration | Real-time data, automation, faster processing | Requires digital maturity and infrastructure |
| Health Outcomes | Continuity of care from trusted providers | Gaps in reproductive or mental health services |
| Investor Confidence | Predictable returns via structured networks | Needs strong regulation for equity and access |
6. The Bigger Picture: Donor Dependency and the Private Sector’s Role
-
The Impact of USAID Withdrawal
USAID has historically supported primary care, health systems, and policy development. Its withdrawal creates:
- Funding Gaps: Many countries rely on donors for 30–70% of health budgets.
- System Weakening: Reduced support for CHWs, logistics, and emergency readiness.
- Threats to UHC: Without subsidies, poor households may forego care. Even NHIFs depend on donor-backed infrastructure.
-
Can Private Insurers and Reinsurers Step In?
Yes—but only with the right incentives and policy alignment.
- Expanding Coverage: Microinsurance can reach informal workers—if products are affordable and trusted
- Health Reinsurance: Reinsurers buffer shocks and enable broader risk-taking.
- Attracting Investment: Blended finance reduces risk and draws impact investors.
-
What Needs to Happen
- Government Must Act as Enablers: Build digital insurance frameworks, treat health financing as infrastructure.
- Improve Risk Pooling: Aggregate fragmented schemes and introduce risk equalization.
- Build Digital Infrastructure: Invest in health IDs, e-claims, and mobile payments.
- Leverage Community Networks: FBHs deliver 30–50% of care in many African countries. Integrating them into NHIFs or DLHMI schemes can dramatically expand reach.
Final Word
Digital life and health microinsurance—when delivered through trusted channels, supported by private investment, and reinforced by digital infrastructure—can redefine how UHC is delivered and financed. It’s not just about expanding coverage. It’s about building a sustainable, equitable future for healthcare access—especially for those who need it most