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Webinar slides on "Managing Partnerships in Microinsurance
 

Webinar slides on "Managing Partnerships in Microinsurance

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These slides were presented during the webinar on "Managing Partnerships in Microinsurance" conducted by the Facility on 1 March 2012. The webinar highlighted the stages of partnership, key points and ...

These slides were presented during the webinar on "Managing Partnerships in Microinsurance" conducted by the Facility on 1 March 2012. The webinar highlighted the stages of partnership, key points and strategies that can be used per stage, success factors and pitfalls, as well as real cases in partnership management.

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    Webinar slides on "Managing Partnerships in Microinsurance Webinar slides on "Managing Partnerships in Microinsurance Presentation Transcript

    • WEBINAR ON Managing Partnerships In Microinsurance 1 March 2012 Presenter: Kelly Rendek Consultant Presenter: Presenter: Richard Leftley Jeremy Leach CEO and President Consultant MicroEnsure Moderator: Jasmin Suministrado Knowledge Officer Microinsurance Innovation Facility1
    • Interfacing with the webinar system Hides/unhides the control panel Polls will also be opened during the webinar – participate by clicking on your answer Click here to raise your hand Tell us what you think. Type your questions/ comments here even while the Please send chat presentation is on- TO STAFF going.2
    • Profile of participants More than 350 registered By Region participants By Type of Organization By Years in Microinsurance3
    • WEBINAR ON Managing Partnerships In Microinsurance 1 March 2012 Presenter: Kelly Rendek Consultant Presenter: Presenter: Richard Leftley Jeremy Leach CEO and President Consultant MicroEnsure Moderator: Jasmin Suministrado Knowledge Officer Microinsurance Innovation Facility4
    • Introduction • Managing Partnerships Study: “good” partnerships have been identified as one of the key factors in the success of a microinsurance program: – What makes a “good” partnership? – How do we define success for a MI partnership? – What can we learn from the experiences of others to ensure effective partnerships? • Study included analysis of 7 cases, covering a range of countries, products and partnership structures: – South Africa: Old Mutual and Shoprite; Old Mutual Imbizo program – Philippines: Pioneer Life and Catholic Bishops Conference – Kenya: CIC and NHIF – India: ICICI Prudential and MRIL tea company – Peru: La Positiva and rural irrigation boards – Pakistan: AKAM and FMiA + Hollard Insurance, RBAP, MicroEnsure5
    • The Partnership Lifecycle Search Assessment and Design Selection and Set Up Evaluation Implementation Termination Maintenance6
    • SEARCH • Identify a need or capacity gap within your own organisation for which you need a partner to have a successful MI program – For example: • an insurer seeking an aggregator for distribution • an aggregator such as an MFI/mobile operator/retailer seeking an insurer • Identify potential partners to meet that need7
    • SEARCH Another approach: • Identify needs of external organisations for which you can provide a solution – For example, an organisation seeking growth opportunities for which providing insurance might bring them more customers • Evaluate what would be required from an insurer for a non- insurance entity to be interested in this opportunity – For example: • Commissions or profit share or other financial compensation • Risk mitigation for partner • Added value to existing business of partner • Meeting social or non-financial objectives of partner8
    • SEARCH Examples • Insurance addressing a need that an aggregator has. This is where a partnership is most successful as both organizations have an alignment of interests. • For example: o The credit risk of a retailer / bank‟s loan book affecting its credit rating, therefore requiring an insurer to take the risk off its balance sheet o To incentivise spend / ARPU (average revenue per user) on its core product by for example linking insurance to use of airtime (M- insurance) o Increased competition where insurance could allow an organization to differentiate itself o Added brand benefits as insurance shows it „cares‟ for its customers. o To outsource the procurement / service requirements to an insurer such as on a disaster risk product9
    • SEARCH Examples • Consider what problem the product will fix for your partners and what will motivate them • Consider these companies in Ghanaconcerned about what will reduce its wanted to have clients “loyalty” from borrowers ability to repay loans; its subscribers measured by death, funeral costs, market fires, increased ARPU and reduced churn emergency hospitalisation wanted to drive uptake of savings10 accounts and average balance
    • ASSESSMENT and SELECTION • Include objective criteria: – size, outreach, type of client base, systems capacity, etc. • Will the potential partner contribute sufficiently to growth of the program? • Aligning interests and objectives is crucial • Trust and commitment are the most important factors in maintaining a successful partnership11
    • ASSESSMENT and SELECTION Examples • Implementing health insurance in India – Complex partnership model MFI Risk carrier MicroEnsure Hospital network – Need to consider the economics across the value chain – McKinsey study showed that there were issues with how health insurance was delivered in India – New model was designed focused on fixing service issues for clients and ensuring all partners needs were addressed – This “new model” required critical mass of 50,000 people per district – Partners chosen based on ability to deliver scale12
    • ASSESSMENT and SELECTION • Appendices include sample tools such as assessment questionnaires, checklists, partnership agreements and communication protocols • Checklists and other tools can be helpful at different stages of the partnership, particularly at assessment and implementation stage, but also for evaluation • Involving a third party to facilitate partner discussions can be more productive than self-assessment13
    • Sample Assessment Questions • How does this partnership fit with our respective organisational missions and long-term goals? • What is the purpose of the partnership? Do we have a common goal? • What is the current level of trust between our organisations? Is the level of trust high enough to encourage risk-taking? • What are the risks to either organisation in this partnership? • Who provides leadership for the project? • How will the key roles or functions of the partnership be filled to ensure it is successful? • Are there clear lines of accountability for the performance of the partnership? • What is the financial participation/contribution of each partner? • What are the non-financial contributions of each partner? • Do all project members, including all levels of management, participate in all critical decisions made in the partnership? • How will service to clients be maintained if the partnership is terminated?14
    • Insurer Assessment Checklist—RBAP/MABS15
    • DESIGN and SET UP • Pre Contract Process – after deciding to work together but prior to project implementation • Provides foundation for formal or informal agreement, if decide to go ahead with partnership • but partnership may not actually proceed past this stage • Goal is is to have a collaborative dialogue with partner that develops trust, understanding and commitment • Can use assessment questionnaire or checklist to guide discussions • This stage may include an initial MoU or Non-disclosure agreement to capture the intended collaboration, which will be formalised in a contract at the end of the process16
    • IMPLEMENTATION Design and Set Up 1. Decide partnership structure 2. Develop appropriate incentive structure for all partners 3. Create joint business case Need not be exhaustive, But should be REALISTIC Implementation And done in COLLABORATION 1. Clearly define roles and responsibilities 2. Finalise business plan 3. Agree on regular communications 4. Develop systems integration and reporting requirements 5. Formalise in final contract/legal document17
    • MAINTENANCE • Effective communication is a key factor Top-down Informal Formal Bottom-up • Negotiating product features – Collaborative approach to product development, even if insurance risk borne by only one party • Retaining commitment – Recognise learning, even when financial progress is incremental – Flexibility and collaboration is key to managing challenges18
    • EVALUATION • When to evaluate if change is required? – Agreed timeframes for review – Sudden external change (eg, regulatory) – Unilateral action from one partner – Experience significantly varies from business plan/expectations • Internal evaluation – Can use assessment questionnaire throughout partnership cycle • External evaluation – Have third party perform independent evaluation19
    • Summary of the Lifecycle • Cyclical process – easier at the beginning when everyone is excited about the new venture – harder and more challenging later on, as issues arise and need to be solved – for ongoing partnerships, it becomes a continuous cycle • Trust and commitment develop through solving the various challenges together – a necessary part of the process for a sustainable partnership20
    • Case 1: Hollard - Microensure 2008: International partnership re-insurer for MicroEnsure international microinsurance through a cell captive „underwriting manager‟ across arrangement health, weather index insurance, life and non-life products • Whilst it remains early days, the partnership faced many challenges: – Risk appetite differed between the organizations. As Hollard took the insurance risk whilst MicroEnsure did the pricing, there was misalignment of risk. This is now being restructured. – Lack of clarity around the role as it was the first of its kind for both organizations; it was Hollard‟s first multi-national microinsurance partner. – Distribution partnerships took much longer to take off than expected so less exciting for the owners of the P&L – No or limited overlap in countries, so communication21 was tricky
    • Case 2: Hollard - PEP 2006: Start of partnership Now have sold 500,000 funeral risk carrier for funeral insurance insurance products large South African cash-based retailer focused on low-income product market acting as distribution channel • Partnership has remained strong, despite challenges because of: – Long term view of the market where both parties are committed to getting it right for their customers and have „patient capital‟; – Strong focus on relationship management at multiple levels of the organisation, including a well functioning JV Board. • Key is also buy in at operational level – Joint decision making – Alignment of financial incentives – Common vision of the market22
    • KEY SUCCESS FACTORS • Clear understanding of the problem that the distribution partner has, and how insurance is going to help fix it • Understanding of the value partners bring and how this is to be recognized and recompensed • Complete alignment of vision and interest • No one single factor that leads to success, but need to avoid many different possible pitfalls • Collaboration: each partner contributes strengths but also compromises when necessary23
    • WEBINAR ON Managing Partnerships In Microinsurance Presenter: Kelly Rendek Consultant Presenter: Presenter: Richard Leftley Jeremy Leach CEO and President Consultant MicroEnsure Moderator: Jasmin Suministrado Knowledge Officer Microinsurance Innovation Facility24