Fishing is a tough, dangerous job under the best of circumstances. TV programs, such as the Most Dangerous Catch make great entertainment of the perils and pitfalls of Alaska’s trawler industry. Half a world away, in Ghana, the life of artisanal fishers is fraught with far greater risk. Ghana’s fishermen often go out 200-300 miles into the Atlantic in small, open dugout canoes for days at a time to pursue ever-dwindling stocks of fish. They assume large amounts of debt to finance boats and expeditions. An unexpected storm or accident at sea can result in serious injury or death, leaving the fishers and their families massively in debt and unable to earn a living.
To break this vicious cycle, fishers need a way of managing risk and building savings – essentially a micro-insurance product. Ghanaian insurance companies, such as Millennium Insurance and UT Life saw the potential to serve the fisher market, but developing a viable product targeted at Ghana’s over 1 million people working in/around coastal fisheries is extremely challenging: an untested market segment, unproven willingness to pay and a client base with low rates of literacy and numeracy.
To help companies buy-down the market risks, Resonance facilitated a partnership between UT Life and Millennium Insurance, USAID/Ghana’s Sustainable Fisheries Management Project (SFMP) which is implemented by the Coastal Resources Center at the University of Rhode Island, Vodafone and BIMA to prototype and pilot a new micro-insurance and savings product called the Fishers Future Plan (FFP). Launched in October 2016, the product was piloted in three coastal communities in Ghana. The partnership effectively de-risked the development of a minimum viable product (MVP) by effectively buying down three forms of risk:
- Financial Risk. By spreading the upfront investment costs of the pilot across several partners, the FFP partnership significantly reduced financial risk for the corporate partners. This made the investment much easier to justify to corporate CFOs.
- Execution Risk. Because the partnership brought together partners with deep market and technical expertise in insurance, mobile money and coastal fisheries, FFP was able to move quickly, significantly reducing execution risk.
- Reputational Risk. By working collectively – local companies, major multinationals and the SFMP project (with its backing from USAID and technical leadership from the University of Rhode Island and a host of local NGOs deeply embedded in Ghana’s fishing communities) – the FFP partnership provided assurance that the pilot would be managed appropriately and transparently, thereby reducing potential reputation risk.
In the initial, 6-month pilot (May-October 2017), the FFP attracted more than 3,000 paying customers, demonstrating strong consumer demand for the micro-insurance product and providing invaluable feedback regarding the user experience, marketing and product features. In the second phase of the partnership, FFP will target reaching 15,000 customers by the end of 2018 with the goal of scaling up across the Ghanaian market in 2019-2020.
Fishing will always be a perilous vocation, but thanks to FFP micro-insurance, fishers and their families now have a way of managing risk and building their savings. As more and more companies, NGOs and donors look to develop inclusive business models, partnerships can serve as a powerful de-risking tool, enabling the creation and scaling of new products and services at the Base of the Pyramid (BoP).