More than 60 insurers are now active in the global inclusive insurance space, up from seven in 2005, according to international law group Clyde & Co.

Inclusive insurance covers all products aimed at uninsured and under-insured markets but is broader than microinsurance, which Clyde & Co says suggests a mini-version of existing products and distribution networks.

Four billion people are not served or underserved by insurance markets, but distribution partnerships are now forming between carriers and micro-insurance institutions, mobile network operators, agri co-ops and commercial banks, the report says.

A long list of contributing factors to the low penetration of insurance in some markets include lack of infrastructure, low levels of education, financial literacy and insurance, low disposable income and lack of formal documentation, informal employment, lack of historical data extreme weather events and low local knowledge.

Clyde & Co says insurers wishing to develop inclusive insurance products must recognise that it’s not always possible to investigate the specific risks associated with individual customers who may have no fixed address or proof of identity, and no wage.

It suggests frequent contact through digital technology can help build trust, provide advice and guidance, assist financial literacy, and help build a sense of value.

Some insurers are turning to satellite data for risk assessment and loss adjusting when large numbers of small rural landholdings make the cost of verifying losses too high. Drones are also being used to assess damage.

While transaction costs can be high in cash-drive markets, and collecting premiums and paying claims “remains a challenge”. Insurers can work with mobile phone operators to solve this problem, the report says.