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Can cooperatives evolve into the mainstream? (CIC Insurance Group, Kenya)


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This presentation was delivered by Mr David Ronoh (Manager at CIC Life Assurance, Kenya) at the ICMIF-AOA Development Network Seminar (18-20 September 2013; Manila, The Philippines)

Published in: Business, Economy & Finance
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Can cooperatives evolve into the mainstream? (CIC Insurance Group, Kenya)

  1. 1. Can Cooperatives Evolve Into Mainstream? David K Ronoh Managing Director CIC Life Assurance Ltd.
  2. 2. CIC – CurrentlyCIC – Currently  CIC ranks among the most successful insurance companies in Kenya and is the leading co-operative insurer in the continent of Africa.  CIC is the market leader in group life business in Kenya and a leading micro-insurer in Africa and the developing world.  CIC is a role model in the Co-operative movement in the developing world  CIC is owned by 1,560 Co-operative Societies and around 3,900 individuals  The Co-operative Bank owns a significant stake, providing leverage on Bancassurance  CIC is the fastest growing insurance Company in Kenya and ranks position 2 in terms of Market share  CIC is the leading insurer of the Co-operative and the Micro -Credit sectors  CIC provides financial services through our subsidiaries; CIC Life Assurance, CIC General Insurance and CIC Asset Management
  6. 6. KENYAN INSURANCE BUSINESS AWARDSKENYAN INSURANCE BUSINESS AWARDS 6 Notably, winning the staff training & Development award for two consecutive years.
  7. 7. CIC As a role model in Kenya Insurance IndustryCIC As a role model in Kenya Insurance Industry CIC – attracting goodwill/respect from regulator (good governance, compliance & leader of innovation ) CIC Promoting co-operative model of being social and commercially successful • Demonstrated co-ops capable of being big and excellent • Socially responsible, trustworthy and promoting fairness/justice • Good/fair employer with low staff turnover, empowered/motivated staff • Promoting ethical practices – differentiation based on co-op values and quality CIC continuously practicing the to cooperative model while being sustainable • Assists religious & other group based organizations to establish co-ops • Capacity building for leaders/staff, promoting good risk management practices in co-ops (promoting good practices for growth & sustainability • Role model – sharing with delegations from other co-ops locally and within Africa 7
  8. 8. Product Dev. & MarketProduct Dev. & Market PositioningPositioning• Main drivers of product development at CIC are: – Dynamism – leveraging on cutting edge technology to deliver our products to our clients – Fairest of price and Fairness – balancing between social and commercial gains which is driven by the spirit of cooperativeness; ensuring products are easily understood by distributors and clients to minimize misselling – Highest of quality – providing the best product features possible – Fastest of service – How do we get the product as close to the client as possible?
  9. 9. Product Dev. & MarketProduct Dev. & Market PositioningPositioning• Market Research – Focus group discussions with clients and distributors – Using tools to benchmark the product – PACE analysis • Marketing Strategy – Used to position the product by identifying the target market, willingness to pay, distribution strategy etc – Identifying Strategic partners eg. Banks, Saccos, Telecoms, MFI’s etc – This is KEY to success of any product • Product Design – Various stakeholders come together to “design” the product with representatives from marketing, sales, PR, actuarial and operations (and where possible clients are also involved – Co-creation) • Pricing – Using actuarial techniques – driven by CIC’s customer value proposition of “fairest of price” – Balancing between social and commercial gains – Willingness to pay • Pilot Testing & Launch – Controlled marketing eg. selling to a particular MFI, or a particular geographical area – Monitoring and evaluation – leveraging on the actuarial team for in-depth analysis of performance – Adjusting the product – Launch
  10. 10. Product Dev. & MarketProduct Dev. & Market PositioningPositioningDeveloping Microinsurance Products – Balancing between social and commercial gain in pricing – ensuring profitability while providing the fairest of price. This is driven by reducing commissions, leveraging on technology to reduce distribution costs and designing small ticket insurance policies. – Use of mobile technology to ease accessibility – Identifying the most suitable distribution platform – Continuous monitoring is important as experience is low in this market. In the long-run, this will provide optimal pricing Strategic Partnerships – Partnering with organizations with already established clientele such as: Saccos, Transport companies, Self help groups, MFI’s, Supermarkets, hospitals etc. – Partnering with Telecoms to leverage on their already existing clientele, network and mobile money agents – Bancassurance – Leveraging on bank networks and clientele
  11. 11. Operational Management & effeciencyOperational Management & effeciency Streamlined and synergistic organization Cost containment and reduction Productivity improvement On-going reallocation and redeployment Deploy the right technology to facilitate efficient service delivery and create new markets
  12. 12. Risk ManagementRisk Management This involves current and prospective impact on earnings or capital arising from adverse business decisions, improper implementation of decisions or lack of responsiveness of industry changes and CIC manages by : •Integrating Risk into Strategic PlanningIntegrating Risk into Strategic Planning •Building Strategic Risk Assessment process •Evaluating Strategic Business Risk •Return driven strategy •Focusing on Genuine assets •Vigilance to forces of change •Disciplined Performance Measurement and Valuation
  13. 13. People ManagementPeople Management CIC philosophy on people management is to create an enabling environment for greatness by Undertaking continuous, effective professional leadership development. Ensuring that the CIC Boards, management and staff embrace the vision, mission and core values of the organization. Effective communication at all levels Appointing and developing extraordinary leaders at every level. Proper remuneration/incentives Institutional Culture Challenging the status quo
  14. 14. Future Growth optionFuture Growth option CIC’s main objective is to provide the best financial solutions for the cooperatives, micro sector & banking industry through Alternative Distribution Channels • Saccoassurance – Accessing individual cooperators to provide personal insurance services • Mobile Technology – Using ICT to drive efficiency • Direct Marketing – Marketing Executives • Retail outlets –community Based Organizations • Strategic Alliances • Banc assurance by accessing individual accountholders to provide personal insurance services Regional Expansion into COMESA Region • Southern Sudan, Uganda , Malawi , Tanzania & DRC