Innovation can extend the reach of insurance in emerging markets, contributing to overall economic development and an improved quality of life, the latest Swiss Re Sigma report says.

“The evidence-based research being done today offers more granular insights about the contribution of insurance across a broader range of development metrics, findings which can inform policy decisions,” Swiss Re Chief Economist Kurt Karl says.

A better understanding of barriers to buying insurance can shape new approaches to increase coverage, and technology has proven a key enabler in many countries, according to the report.

Swiss Re says the growing proliferation of new data, combined with smart analytics and predictive modelling, is allowing for more granular underwriting, while mobile technology has been used to distribute cost-efficient micro-insurance.

“Parametric insurance products, for example, rely on weather stations for their data and can pay claims in an automated manner using mobile money methods,” Swiss Re says.

“By 2016, such systems had helped, for example, more than 1 million farmers in Kenya, Tanzania and Rwanda buy risk protection via the crop, livestock and index insurance offerings.”

The report says governments can play an important role through mandatory insurance and providing a supportive policy environment.