Microinsurance and the importance of an inclusive approach in service innovation

Abstract

As services grow in importance in the world economies the importance of understanding innovation in services grows increasingly important. Furthermore, emerging markets are mostly in the beginning of building the more sophisticated part of the service economy and face many challenges in doing so. This master thesis aims to feel a gap in understanding social innovation from a management perspective, as well as understanding the interplay between stakeholders in achieving innovation for emerging markets. By structuring the analysis around a microinsurance case in Kenya this paper seeks deeper understanding of the characteristics of service innovation, it seeks the answers what the success factors are in the value chain of microinsurance, and what technological convergence means for the insurance industry in general. To reach success an innovative approach to business models has shown to be necessary and this paper looks at how different stakeholders together can reach success in developing and implementing a new service in emerging markets. This paper investigates the following by utilizing frameworks in services, convergence, collaboration and research based view, as well as how to develop new business models. The findings show that drastic cost reductions and cultural barriers are challenging the companies to (re)design their services. The converging bases of knowledge from the various stakeholders, combined with managerial creativity, are the solution to enter the emerging markets. To achieve sustainability, stakeholders will need to open their innovations with the partners and design business models with distinct revenue streams that avoid asymmetric information.