ECONOMIC SHOCK AND IMPLICATIONS
In emerging countries, COVID speeds up telemedicine and interest in formal insurance
By Garance Wattez-Richard, Head of AXA Emerging Customers
In our markets, the impact of the COVID-19 crisis has been immense. People who were considered middle class or emerging middle class have slipped back into poverty. They may have had jobs as construction workers, for example, or shop owners, but at this point it’s hard to see how government support will reach them, given that they are not part of the formal economy. In many of the countries we work in – in Asia, Africa and Latin America – the formal economy is often limited to civil servants and employees of multinationals. Even those working for SMEs rarely have formal work contracts. At the same time, COVID-19 has also hit our distribution partners. Especially for micro-finance institutions (MFIs), their business is in-person. During the lockdown, people weren’t able to come to their offices to repay loans. That, in turn, has meant they don’t have liquidity to issue new loans.
“There is an opportunity here to rethink our approach. Over these past few months, we have had a real crash course not just in health, but also in prevention and risk management.”
There is an opportunity here to rethink our approach. Over these past few months, we have had a real crash course not just in health, but also in prevention and risk management. As we emerge from this pandemic, we are going to see a rise in telemedicine, and we’re going to see more interest in formal insurance. During the pandemic, people often refused to go to hospitals for fear of infection. They switched instead to telemedicine. People are beginning to realize that healthcare doesn’t have to be done within the four walls of a hospital, and that telemedicine brings definite benefits: less time spent on transport or in waiting rooms, and increased efficiency. With telemedicine, you can treat 20-30% more patients in a day. It is a way of making healthcare cheaper and more accessible. There are some conditions that can’t be diagnosed online, but it’s a minority. And telemedicine is not just tele-consultation, it’s also tele-drug delivery and tele-specialists.
“This crisis is highlighting another trend: the need for formal insurance. In emerging markets, our real competitors aren’t other insurance companies. It’s doing nothing.”
We’re now extending telemedicine to 1 to 1.5 million people in eight countries in Asia, Africa, the Middle East and Latin America. For the time being, with COVID-19, it is free of charge. Hopefully, it will reach people who have never before had access to a doctor. This crisis is highlighting another trend: the need for formal insurance. In emerging markets, our real competitors aren’t other insurance companies. It’s doing nothing. That has been the alternative: hiding money or jewelry under your mattress. We need to provide affordable insurance, and help people make that switch from doing nothing to doing something.
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