WEBINAR ON       New Frontiers in Microinsurance                Distribution            Presenter:                        ...
Interfacing with the                         webinar system      Hides/unhides         the control                        ...
Webinar Attendee         Profile     More than 400 registered3
Distribution establishes the                Client/Business relationshipCustomer   Distribution moment                    ...
Done right, distribution                  improves economic value             The customer is confident that the          ...
Both Customer and Insurer               benefit from a “good” saleCustomer     Clear                   Straight-          ...
Examples shown today             improve the transaction                     furtherCustomer                              ...
MI Network organizes work on                     adjacent key topics    Financial       Climate                           ...
More work is needed    If you have a GREAT IDEA, please contact the    Microinsurance Innovation Facility.    If you work ...
Exploring new channels and        moving beyond sales                Anja Smith              anja@cenfri.org              ...
Why alternative                       distribution?     • Characteristics:        – Scale through concentration        – P...
Case 1: Hollard/Pep         (South Africa)     • Channel: cash-based low-income       clothing retailer committed to ensur...
Case 2: Hollard/Take-it-       Eezi (South Africa)             • Channel: Third-party bill payment               provider ...
Case 3: Mapfre/Codensa            (Colombia)     • Channel: Codensa - largest electricity company       in Colombia, aroun...
Case 4:      Colseguros/Carrefour           (Colombia)     • Channel: International French supermarket       chain, Carref...
Case 5: Mapfre/Casas        Bahia (Brazil)     • Channel: Credit-based appliance and       furniture retailer     • Produc...
(Some) key issues     • Innovative use of client information     • Need for layered sales approach     • Model success (al...
Enabling alternative     distribution through          technology          Pranav Prashad          prashad@ilo.org18
How to enable insurance sales     in a multiproduct environment?19
Rural Retail :                        providing outreach                                              Multiproduct purchas...
Technology enabled                               Distribution                                 Multi-pronged               ...
1. Card based               premium: Max Vijay     Characteristics:     • Various denominations     • Premium flexibility ...
1. Insurance sales at                      retailers: corner stores                                            Max Vijay… ...
2. Hand Held Technology                         Platform • Enhanced Reach and accessibility • On the Spot policy and claim...
2. Insurance sales stands         inside retail outlets:               Bradesco                           Certificate     ...
3. Mobile phone technology                    for enrolment and claimsADMINISTRATION                             CUSTOMER ...
4. Smart Cards: “Suitcase based”              4. Smart Cards         enrolment station: RSBY27
5. Technology based                 distribution: Rural POSs                         •   Instant delivery of policy certif...
Reaching closer through direct contact:     Farmers’ meetings and Van Campaigns29
MicroEnsure –     Mobile Insurance       Mi-Life     Insurance:                         Life insurance sold via Mobile Mon...
MicroEnsure –     Mobile Insurance      Tigo Family          Care        Life insurance sold to Tigo subscribers       Ins...
MicroEnsure –                                                            Mobile Insurance     Product & Process Features  ...
Wrap-up     • « Alternative Distribution » for the Insurance Industry is       actually the primary place where customers ...
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Webinar slides on "New Frontiers in Microinsurance Distribution"

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These slides were presented during the Microinsurance Innovation Facility’s second webinar, co-organized with the Microinsurance Network, and held on July 13th, 2011. It focused on "New Frontiers in Microinsurance Distribution", their strengths and weaknesses, and areas that can be explored to make these channels work more effectively from the insurer and client perspective. This webinar follow a recent paper on alternative channels prepared by Cenfri (http://www.ilo.org/public/english/employment/mifacility/download/brnote7_en.pdf­). Presenters were Brandon Mathews from the Zurich Financial Services, Anja Smith from Cenfri, and Pranav Prashad from the Facility, with Jasmin Suministrado of the Facility as moderator.

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Webinar slides on "New Frontiers in Microinsurance Distribution"

  1. 1. WEBINAR ON New Frontiers in Microinsurance Distribution Presenter: Presenter: Presenter: Brandon Mathews Anja Smith Pranav Prashad Head of Emerging Consumer Director Microinsurance Officer Zurich Financial Services Center for Financial Regulation and Microinsurance Innovation Facility Inclusion (CENFRI) Guest Presenter: Moderator: Peter Gross General Jasmin Suministrado Manager Knowledge Officer Microinsurance Innovation Facility1 MicroEnsure, Ghana
  2. 2. Interfacing with the webinar system Hides/unhides the control Polls will also be panel opened during the webinar – participate by clicking on your answers Tell us what you think. Type your questions/ comments here even while the Please send chat presentation is TO STAFF on-going.2
  3. 3. Webinar Attendee Profile More than 400 registered3
  4. 4. Distribution establishes the Client/Business relationshipCustomer Distribution moment Claims moment is where customer fulfils thatInsurer and insurer reach an understanding understanding.4
  5. 5. Done right, distribution improves economic value The customer is confident that the risk has transferred.Customer Claim Distribution moment. momentInsurer The insurer is confident that it knows the risk that it has accepted.5
  6. 6. Both Customer and Insurer benefit from a “good” saleCustomer Clear Straight- Attractive plain forward offeringInsurer language transaction6
  7. 7. Examples shown today improve the transaction furtherCustomer Expand Reduce Increase Access &Insurer Cost Effectiveness Outreach7
  8. 8. MI Network organizes work on adjacent key topics Financial Climate Health Impact Education Change Consumer Social Agriculture Protection ProtectionCustomer Distribution of Insurance to CustomersInsurer Capacity Performance Technology Building Indicators Data Regulation Actuarial Analysis8
  9. 9. More work is needed If you have a GREAT IDEA, please contact the Microinsurance Innovation Facility. If you work for a GREAT ORGANIZATION, contact Veronique at the Microinsurance Network. - Annual membership for your organization: €500 - € 10,000 donation will provide annual seed funding for a working group. If you have a GREAT DESIRE and EXPERIENCE to contribute, please get involved with the Network Working Groups.9
  10. 10. Exploring new channels and moving beyond sales Anja Smith anja@cenfri.org +27 21 918 439010
  11. 11. Why alternative distribution? • Characteristics: – Scale through concentration – Presence of infrastructure footprint – Transaction platform – Standalone voluntary products – Trusted brand • What it is not: – MFI-based distribution with a specific focus on credit risks, bancassurance11
  12. 12. Case 1: Hollard/Pep (South Africa) • Channel: cash-based low-income clothing retailer committed to ensuring value to clients • Product: Individual & family funeral • Off-the-shelf distribution • Take-up: 215k policies (2009) • Servicing & claims: Premium collection & initial client info collection – Pep; full client registration, on-going service & claims management by TPA • Key issue: Repeated product changes to make it work, ensuring value to clients top of mind12
  13. 13. Case 2: Hollard/Take-it- Eezi (South Africa) • Channel: Third-party bill payment provider operating through network of informal vendors. Use GPSRS technology to facilitate sales of cellular airtime, electricity and insurance. • Product: Individual and family funeral insurance cover • Take-up: Low levels of take-up with 1,800 in-force policies (2009) • Servicing & claims: Vendor does client registration, premium collection. TPA does claims management, • Key issue: Lack of trusted brand13
  14. 14. Case 3: Mapfre/Codensa (Colombia) • Channel: Codensa - largest electricity company in Colombia, around 2m customers in Bogota • Multiple distribution channels using Codensa’s bill payment system to collect premiums: out- bound call centre, face-to-face sales and mail shots • Product: Life, PA, funeral, home and vehicle insurance • Take-up: Significant take-up – at least 300k policies sold (2008) • Servicing & claims: Product administration & servicing shared, Codensa call centre handles claims, Mapfre manages operational side of claims • Key issue: Innovative use of client information, layered sales approach14
  15. 15. Case 4: Colseguros/Carrefour (Colombia) • Channel: International French supermarket chain, Carrefour • Product: – “ PA rounding off” – premium & cover based on small change at payment point – More complex insurance sold by insurance desk in-store (PA, medical assistance, household content, life cover in the form of monthly payments and life cover in the form of educational support to child dependants) • Take-up: PA round-off - sold 2.9m policies in 2009 • Servicing & claims: Premium collection & registration– Carrefour; servicing & claims – Colseguros • Key issue: Product developed to fit clients’ pockets15
  16. 16. Case 5: Mapfre/Casas Bahia (Brazil) • Channel: Credit-based appliance and furniture retailer • Product: Life, unemployment & PA insurance – Additional policy benefits: lottery ticket, pharmaceutical discounts • Sold by in-store Casas Bahia agents/staff • Take-up: Significant • Servicing & claims: Joint policy servicing & administration by Casas Bahia & Mapfre • Key issue: Premium payment, after-sales support through Casas Bahia agents (one point of interaction only)16
  17. 17. (Some) key issues • Innovative use of client information • Need for layered sales approach • Model success (also by intermediary) requires significant investment: – Funds (some cases) – Time and patience • Distribution innovation not sufficiently client-centric – Partner commitment to value matters – Distributors as “one-stop shops”?17
  18. 18. Enabling alternative distribution through technology Pranav Prashad prashad@ilo.org18
  19. 19. How to enable insurance sales in a multiproduct environment?19
  20. 20. Rural Retail : providing outreach Multiproduct purchases • Customer spends time in the outlets which can be utilised for insurance awareness and conversionPresent in villages cateringto multiple customer needs• Need to train in-shop assistants forinsurance• Haryali Kisan Bazar with ICICI PrudentialHDFC Ergo20
  21. 21. Technology enabled Distribution Multi-pronged delivery model 1.Scratch cards 4.Smart Cards 5.PoS 2.Hand held /Biometrics system machines 3.Mobile Phones Scratch Cards Low ticket premium Technology collection Innovations Handhelds, Mobile phones Identification Smart cards, PoS Policy confirmation21
  22. 22. 1. Card based premium: Max Vijay Characteristics: • Various denominations • Premium flexibility • Easy top ups22
  23. 23. 1. Insurance sales at retailers: corner stores Max Vijay… • Retailer involvement…great for outreach • Create traffic and awareness of availability • Reinforce by in-shop publicity • Explain insurance through posters • Minimise shopkeeper interactionLessons fromTelecom/FMCG• Starter packs…co. call centre activates• Ideal for top ups…more than 1st timesales23
  24. 24. 2. Hand Held Technology Platform • Enhanced Reach and accessibility • On the Spot policy and claims processing • Storage of various programs on same devise • Reduce fraud in the system • MIS and Data Management • Reduce Transaction time and timely disbursement of money24
  25. 25. 2. Insurance sales stands inside retail outlets: Bradesco Certificate •Instant issue upon sale •Policy number • printed…can be used for claims25
  26. 26. 3. Mobile phone technology for enrolment and claimsADMINISTRATION CUSTOMER ENGAGEMENT•On line enrolment • SMS sent when request• On line receivedAuthorisation • SMS sent when• On line bills authorization processedprocessing • Direct promotional messages• Electronic transfer on customers’ mobile phonesof Payment • Policy updates and remindersto Service Providers FIELD PERSONNEL ENGAGEMENT • Refreshers • Reminders Huge reduction in • Updates travelling costs and • Product clarifications or time for training modifications26
  27. 27. 4. Smart Cards: “Suitcase based” 4. Smart Cards enrolment station: RSBY27
  28. 28. 5. Technology based distribution: Rural POSs • Instant delivery of policy certificate ICICI Lombard • Awareness creation Max New York Life • Trust factor…run by local population 3i Infotec, Comat • Multiple services under one roof28
  29. 29. Reaching closer through direct contact: Farmers’ meetings and Van Campaigns29
  30. 30. MicroEnsure – Mobile Insurance Mi-Life Insurance: Life insurance sold via Mobile Money distributed by Policy bought, managed, claimed on phone MTN Ghana Distributed by dedicated agents in MTN stores Undercuts other life insurance prices by 50-90% GHC 1 = USD 0.70 Mi-Life Insurance Dial Number or Select Option 1. Manage my Insurance 2. Claims 3. Customer Support 4. Authorised Agent30
  31. 31. MicroEnsure – Mobile Insurance Tigo Family Care Life insurance sold to Tigo subscribers Insurance: Free to subscribers, cover based on airtime distributed by Tigo Ghana Distributed by dedicated agents in Tigo stores SMS sent to customer once per month GHC 1 = USD 0.70 Thank you for using Tigo! Based on your Tigo usage in December, your free life insurance is XXX cedis for January. Use more Tigo, get more insurance!31
  32. 32. MicroEnsure – Mobile Insurance Product & Process Features 2011 Results Challenges • Products drive core • Technology – a • Products growing by goals of distribution blessing or a curse? more than 4,500 partner, not insurer new lives insured • Complexity of per day • Policy covers 2 lives partnerships and economics • Will double the • Platform taps into number of basic customer • Diminishing returns Ghanaians insured behaviour issues, on a free product? in 2011 not only demand for insurance • Low loss ratios on • More than 90% of embedded product clients are new to • Client education insurance essential in spite of • Fraud likely to grow potential for scale but will scale • 2011 FT/IFC Award mitigate impact?32
  33. 33. Wrap-up • « Alternative Distribution » for the Insurance Industry is actually the primary place where customers shop. • These channels will reach higher segments in addition to the « target segment» but remain vital to reach this segment. • Developing the right propositions typically requires reiteration… and partners committed to value will more often get it right. • Focusing on this segment requires fundamental innovation to create better access and value. • The segment also presents opportunity for new market entry and rapid growth along with international recognition.33

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