Agile FINANCIAL TIMES
Life Insurance in Africa
Current Trends & Future Outlook
ARTICLE CASE STUDY
in the Middle East
CEO, TA Insurance
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COVER STORY 4
Life Insurance in Africa:
Current Trends & Future
CASE STUDY 7
Energizing Star Assurance
Coverage in the Middle
In conversation with
CASE STUDY 14
Increasing Market Share
for Apollo Munich
Social Media in Financial
Agile FT and Zensar in
There is high level of heterogeneity in the African market with regard to life
insurance penetration. South Africa, an evolved market with high risk acceptance
and high insurance penetration lies at one end of the spectrum. On the other
hand, several other African countries have little or no markets with extremely low
insurance penetration. A number of recent trends, though, are pointing to
growing potential for the industry in many African countries, with specific
opportunity areas emerging. The positive outlook is expected to lead to
increasing competition and change in the business dynamics in the region.
Insurance markets in most countries, with the exception of South Africa, are
under-penetrated, with the main focus being on commercial lines of business in
non-life and group business in the life insurance segment. South Africa currently
accounts for more than 90 percent of the life insurance premiums in Africa.
The life insurance market in most other African countries is particularly
undeveloped. The demand for insurance has been affected by lack of awareness,
low acceptance of risk and poor affordability translating into very low insurance
penetration (see box). On the supply side, lack of insufficiently developed data
on mortality and longevity and a shortage of specialised skills have hampered
African nations have
demonstrated some of the
highest economic growth rates
in recent years.
According to the African
Development Bank, Africa’s
economy grew an average of
4.8 percent per year between
2002 and 2011.
However, poverty levels remain
high, with more than 45 percent
of the population in the region
earning less than
USD 1 per day.
Current Trends &
Recent trends suggest that the size of the market is expected to grow in the
near future on the back of changing consumer demographics and better
targeting of insurance products. This has been substantiated by the foray of
several regional and multinational players into the insurance industry in African
In July 2013, Old Mutual acquired a controlling stake in Faulu Kenya, a
microinsurance company. The deal offers Old Mutual entry into Africa’s
financial market including banking and insurance.
Earlier in 2013, Old Mutual acquired majority stake in Ghana’s Provident
Life Assurance Company. The deal received approval from regulators in
Ghana in September 2013.
NSIA Participations SA Holdings, a Pan African insurance company based
in Côte d’Ivoire, acquired a majority interest in ADIC insurance, a
subsidiary of Diamond Bank in Nigeria.
Sanlam, another South African insurance company, acquired a minority
stake in FBN Life, a subsidiary of First Bank Nigeria.
Local competition so far has not necessarily translated into an expansion in
market. Kenya for instance, has around 46 insurance companies despite a low
life insurance penetration of around 3 percent. In Ghana, a rise in the number
of insurance companies from two in 2006 to more than 16 recently has in fact
led to escalating price wars.
The entry of multinationals is expected to drive better outreach and an
improvement in technical know-how and knowledge resources in the insurance
sector in Africa. Multinational companies are typically also capable of
underwriting larger risks and will likely seek to differentiate the market and
undertake a variety of strategies to increase acceptance, especially in the retail
and micro-insurance sectors.
Going forward, investment potential remains high and more foreign players are
likely to participate. As competition intensifies, consolidation in the industry
will be inevitable to achieve the required scale to sustain and grow.
Evolving Distribution Channels
The distribution channel for life insurance in most African countries has been
broker dominated. In Nigeria for instance, brokers account for 70 percent of
premiums generated, playing a significant role in the industry. So far, the focus
has been on corporate deals with the retail market remaining relatively
However, as the retail market is assuming more prominence, underwriters are
looking to reach out to consumers directly to market and distribute their
products. Companies now seek to reach the retail market through a variety of
means such as through community-based organisations, banks, non-government
and religious organisations.
In order to combat
low affordability, as
well as a lack of
trust in insurers,
products into the
objective is to
consumer with low
levels of premium,
of use and
Insurance Penetration in some African countries
(Swiss Re 2011 Report)
South Africa - 16% Namibia - 7.3%
Ghana - 1.06% Nigeria - 0.06%
Kenya - 3.2%
Bancassurance is a model that is gaining rapid acceptance as
banks enjoy relatively higher penetration in the region and
are also an effective medium to reach out to micro-insurance
customers. So far, bancassurance has been used for non-life
products but more and more partnerships for selling life
insurance are being forged. Sanlam, for instance, has a tie-up
with Standard Chartered Bank to sell its life insurance
products across Ghana, Botswana, Zambia, Tanzania,
Kenya and Uganda.
There have also been attempts to use channels such as
mobile telephony, which now has more than 50 percent
penetration in Africa, for the sale of life insurance products.
Pan Life Africa, a Kenyan life insurance company has
partnered with telecom provider Airtel Kenya to launch a
life insurance product that is accessible to customers
through their mobile phones.
Going forward, to access and service the differentiated
client base, companies will need to develop diversified
distribution channels such as bancassurance, mobile
technology, micro insurance, retail outlets as well as online
Need-based, Customer-focused Products
In order to combat low affordability, as well as a lack of
trust in insurers, companies are introducing tailored and
innovative products into the market. The objective is to
provide the consumer with low levels of premium, required
customization, ease of use and understanding and simple
collection and claims mechanisms.
Micro insurance has been envisaged to play a vital role in
reaching out to the lower income classes who are
disproportionately affected by natural calamities and
accidents. Products such as agriculture and weather-based
insurance products, funeral insurance are also gaining
prominence in the retail markets for similar reasons. A study
by Munich Re showed that microinsurance in Africa has
grown manifold since 2008 and has very high potential in
terms of improving risk coverage for lower income
Takaful insurance is being promoted by companies in
countries where there is a significant Muslim population,
such as in Nigeria. This helps insurers reach customers with
lower acceptability for traditional insurance products.
Going forward, better skills and resources brought in by
multinational insurance companies is expected to result into
better targeting of insurance products and services.
Companies will focus on keeping distribution costs to the
minimum especially for the low-premium paying products.
Bancassurance and mobile telephony are two platforms that
will likely meet this objective. Companies are expected to
focus on building technologies and strategies to improve
capabilities in these areas.
The regulatory structure across Africa is relatively
underdeveloped compared to that in Asia or the Middle East
but has been developing in recent years. So far, regulation
has focused on minimum capital requirements and solvency
ratios for providers. Some countries have made fragmented
progress in smaller areas but the economies as yet lack a
comprehensive framework for insurance players. The CIMA
(Inter-African Conference on Insurance Markets) is
expected to provide more guidance and oversight in the
Kenya, for instance, has introduced penalties on late
settlement of claims as trust in insurance providers remains
a key weakness for the industry. In Nigeria, the government
has enforced compulsory healthcare professional indemnity
insurance and statutory group life insurance. Zimbabwe has
introduced the Micro Insurance Bill which will allow new
and small-to-medium insurance players who cannot meet
high capitalisation requirements to participate in the micro-insurance
Going forward, higher competition and market expansion
will likely put pressure on regulators to introduce changes
that will drive market depth as well as promote greater
transparency. In future, better capitalization in the industry
is expected to improve underwriting capabilities and allow
companies to insure larger risks.
As competition intensifies,
consolidation in the industry
will be inevitable to achieve
the required scale to sustain
Star Assurance Company is an insurance provider based in
Ghana. It was incorporated in 1984 and headquartered in
Accra, operating in seven out of ten regions in the country.
The company provides a variety of non-life insurance
products including motor, travel, personal accident,
industrial and indemnity insurance products, among others.
Star Assurance is now among the top three insurance
companies in Ghana, and a member of the prestigious
“Ghana Club 100” - a listing of the top 100 blue chip
companies in Ghana.
Star Assurance was facing a number of challenges in the
areas of claims processing, policy administration,
underwriting and management information. A technology
upgrade was necessary to aid effective decision making and
bring in scalability to meet the growth rate of the company.
The objectives for Star Assurance were two-fold:
To employ an application that would improve turnaround
time in policy and claims administration
To bring in scalability to reduce cost of operations and
The decision to implement the solution Agilis General
Insurance from Agile FT stemmed from these business
The company issued a Request for Proposal (RFP) and
evaluated eight vendors. Agile FT scored at the top for its
system capabilities, performance and ability to scale with the
operations of Star Assurance. Agilis General Insurance , the
solution by Agile was selected based on its capabilities to
deliver on Star Assurance Company’s unique requirements.
The project was initially scheduled to go live in eight
months. However, Star Assurance required further of
customization to meet the local market requirements. The
project was fully implemented in 11 months. The key users
of the application are the top management team for MIS
reports and those involved in insurance and accounts
activities. The application performs all key functions of the
core insurance processes as well as accounts.
After the implementation of Agilis General Insurance, the
company’s service delivery has significantly improved.
Quicker and faster customer service: The application
has improved the turnaround time in delivering policies
and Claims administration to customers. For instance, the
time to issue a policy has improved from about 20
minutes earlier to about 5 minutes on the Agilis platform.
Reduced fraud: All fifteen branches of the company
became centralized within six months of going live with
the application leading to automation in the Agents’
premium returns. This made it possible to monitor
transactions closely and resulted in quicker turnaround of
Reduced cost: Because the application is lighter, it has
reduced the amount of bandwidth that was required to
access the previous application. This has led to savings in
terms of WAN bandwidth requirement cost.
Another non-quantifiable result has been that Star
Assurance has been able to sign a binding agreement with
four insurance brokers to use the application to carry
underwriting on behalf of the company, which was not
The implementation of Agilis General Insurance has
resulted into end-to-end service delivery capability for Star
Assurance incorporating underwriting, policy
administration, claims, reinsurance and accounting. The
solution deployed includes a business intelligence tool which
makes information readily available for accurate and quicker
decision making processes.
Enabling End to End Service Delivery
for the Ghana-based Insurer...
“The system (proposed by Agile) eliminated a lot of
shortcomings that we had with our previous system and has
enabled us to originate transactions faster and even settle
claims in a timely manner. Agile FT’s team were professional
and have been able to support us in a timely manner.”
Toni JC Bakawu
Head (IT) Star Assurance
Coverage in the
Key Success Factors for
The GCC region together accounted for just 0.4 percent of
the world market for gross written premiums in 2012. The
UAE and Saudi Arabia are the two dominant players in the
region, representing nearly 80 percept of gross written
premiums. However, overall insurance penetration rates at
around 3 percent remain low compared to the global average
as well as emerging markets averages . Globally, insurance
penetration is seen to have high correlation with per capita
GDP. Currently the Middle East is an outlier to this trend
with significantly lower penetration compared to its GDP
per capita, due to which significant growth potential is
perceived for the insurance industry in the Middle East.
Economic growth potential remains strong in the near
future and a consequent rise in incomes is further expected
to improve insurance penetration across the region.
Distribution of non-life insurance in the Middle East region
is dominated by direct sales and brokers, while life insurance
is split between agents for individual business and brokers
for group life insurance. Although the traditional channels
continue to bring in the bulk of business, bancassurance is
expected to play an important role in the Middle East region
in terms of improving insurance coverage, both to existing
customer, as well as to the section of the population hitherto
outside the banking or the insurance network.
The bancassurance model offers key advantages to banks as
well as insurance companies in the Middle East. Compared
to brokers and agents, bancassurance can reach out to a
larger number of potential customers at a much lower cost.
The success of the bancassurance model depends on longer
Bancassurance is expected to
become an important
distribution channel for
increasing insurance penetration
in the Middle East region.
However, for bancassurance to
reach out to hitherto uncovered
sections of the population,
certain key enablers - such as
innovation, training, compliance
and technology - will need to be
term commitment and efficient relationships between banks
and insurance companies. Banks are likely to opt for
insurance companies who are able to demonstrate longer
term commitment and resources as well as provide
innovative products that can be customised to suit the bank’s
For insurance companies, banks with good brand equity and
substantial customer base are lucrative partners. Banks in the
Middle East are better entrenched and have much higher
geographic coverage compared to insurance companies.
Thus, banks are in a position to leverage extensive customer
knowledge to generate insurance sales and to reach deeper
into the wallets of existing customers.
Going forward, some critical factors will ensure that the
potential from bancassurance is fully exploited in the Middle
East to expand the insurance market vis-a-vis merely taking
away current business from other distribution channels,
especially agents and brokers.
Bancassurance typically starts with product lines such as
protection products sold at the time of taking a mortgage or
personal loan, which are simpler to integrate with the banks’
business. As the relationship matures, banks as well as
insurance companies tend to move towards integrating the
product suite of insurers - life, general and medical - across
all lines of business of the banks, including retail, SME,
corporate and wealth management.
There are several such examples of maturing bancassurance
partnerships. HSBC and Zurich Insurance for example,
started their partnership in April 2012 as an exclusive tie-up
to distribute life insurance products in the UAE, Qatar and
Bahrain. In 2012, they extended the coverage to include
general insurance personal lines products, offering the
bank’s customers Zurich’s motor, home contents and travel
insurance, as well as its suite of commercial insurance
However, as the partnership becomes well entrenched, both
the bank and the insurance company need to move a step
ahead and focus on innovation that helps the bank achieve
differentiation among other distribution channels of the
insurance company as well as other banks in the market.
Data mining of customer knowledge can help product
innovation by targeting the right financial solution at specific
stages in the financial planning maturity of the market and
of the customer segment.
Continuous improvement in the distribution systems could
also create differentiation for the bank. Providing an online
platform for purchasing and servicing bancassurance
policies is the current trend among industry leaders. For
instance, National Bank of Oman started to offer its
Himayati range of bancassurance products in life and home
protection online to customers in 2013. AXA is the
insurance partner to National Bank of Oman in the country.
Bancatakaful - the distribution of takaful insurance products
through banks - is also gaining prominence as it allows
outreach to customers who are reluctant to purchase
conventional insurance. Banks as well as insurance
companies are creating separate tie-ups in the bancatakaful
space to exploit this channel.
Motivation and Training of Bank Staff
The bancassurance model depends on a proactive and
perseverant, technically competent and result oriented sales
force. There is typically a cultural difference in the sales
philosophies of banks, which are demand-driven
organizations, and insurance companies, which are need-driven
and more aggressive. Consequently, without proper
Many industry leaders are
embracing innovative tools
to deepen existing
relationships and improve
new customer acquisition
rates through bancassurance.
training of staff and well structured commissions there is typically resistance
to change and a danger of mis-selling, which has a significant long-term impact
on both reputation and revenue streams for banks.
Banks are in a position to leverage multiple channels for distribution through
employees, specialized agents, advisors, direct marketing or former bank
employees. While simpler products can be sold over the counter by bank
employees, specialized products such as asset management or pension plans
require trained advisors with high levels of sales training. Well trained staff can
become adept at spotting new opportunities for sale as well as reporting
existing gaps in customer demands which can be addressed by insurance
companies to improve sales.
Specific commissions and incentives structures targeted at boosting the
motivation of the bank’s staff at various levels of sales complexity are critical
to achieving targets. Technology support is also important in terms of
providing lead management systems, fully integrated processing and delivery of
policies and real time tracking to the sales staff at the bank.
Many industry leaders are embracing innovative tools to deepen existing
relationships and improve new customer acquisition rates through
bancassurance. Technology will be needed to create improvements in the areas
of channel efficiency, personalization and integration that banks offer their
customers, through investments in systems, and operational and service
Bankers and insurers are increasingly putting more emphasis on developing
processes built around the customer such as improved data management and
analytical tools that allow better assessment of customer needs and better
matching of the bank’s services with customer expectations. Systems that
provide easy reporting and compliance will also be preferred, depending on the
type of products being offered by the bank as a part of the bancassurance tie-up.
For example, life and pension products often require greater compliance
and customer information as compared to motor or theft insurance.
Regulation is still evolving in the region and not all countries have as yet
established clear guidelines for bancassurance. Countries such as Bahrain or
Oman have, for example, issued decisions regulating the marketing of
insurance products through banks. However, there is a lack of proper
guidelines in the region in other areas, such as the required qualifications for
bancassurance sales staff.
Evolving regulatory requirements are likely to prompt insurers to amend their
existing arrangements or form new ones to be in line with policy. In future,
there may also be higher compliance requirements that may necessitate
additional reporting or the creation of new roles or departments within banks
and insurance companies to ensure conformity. Current partnerships in turn
will need to be equally dynamic in order to respond to market changes
Going forward, regulation is expected to serve as a catalyst for bancassurance
to be recognized as an efficient and cost-effective way to increase insurance
sales and improve awareness as well as penetration in the region.
As the relationship
matures, banks as
well as insurance
companies tend to
product suite of
insurers - life,
medical - across all
lines of business
of the banks,
CEO - TA Insurance,
TA Holdings Ltd, Zimbabwe
sectors of insurance by focusing on providing par excellence
customer service, risk assessment and management,
underwriting discipline, loss prevention measures and
liquidity management to pay claims in a timely manner in a
market beset by very tight liquidity conditions.
With the insurance industry in sub-Saharan Africa
seemingly back on the recovery path, but with insurance
penetration still hovering around 5%, what do you think are
the critical success factors to lead the insurance industry to a
sustained growth trajectory?
With the introduction of the US dollar as the main currency
in 2009, the insurance industry has registered significant
growth with the short-term industry growing from $78M in
2009 to $194M in 2012 and the life industry growing from
$35M in 2009 to $196M in 2012. On the back of economic
stability, low inflation, growth in the economy and a stable
currency regime, the industry came out of the doldrums in
2007/2008 and managed to grow much faster than the GDP
growth during the 2009-2012 period.
The critical success factors for sustained growth in the
industry in Sub-Saharan Africa hinges on the following:
a. Macroeconomic stability and economic growth in the
b. Removal of infrastructure bottlenecks in order to
promote intra-African trade, ease of travel and reduce the
cost of travel.
c. FDI inflows into the resource, energy and infrastructure
Can you give us a brief overview of TA Insurance’
positioning within the financial ecosystem in Zimbabwe, its
future plans and focus areas?
TA Holdings Ltd is a regional investment holding company
listed on the Zimbabwe Stock Exchange (ZSE) with its
insurance interests located in Zimbabwe, Botswana and
Uganda. TA Insurance, the insurance arm of the group is a
leading player in the insurance industry in Zimbabwe with
investments in short-term (general) insurance (Zimnat Lion
Insurance), life assurance (Zimnat Life Assurance),
reinsurance (Grand Reinsurance), asset management
(Zimnat Asset Management), microfinance (Zimnat
Financial Services) and medical aid administration
TA Insurance is one of only 2 companies in Zimbabwe that
have operations in all three sectors of the insurance space -
short-term, life and reinsurance. The investments in asset
management, microfinance and medical aid administration
are through the life company. The operations in Botswana
(Botswana Insurance Company) and in Uganda (Lion
Assurance Company) are in the short-term insurance sector.
The market in Zimbabwe is currently characterized by
intense competition as evidenced by the huge number of
players in the various sectors. For the short-term market
there are twenty three operating companies with a market
size of US$194M, nine reinsurance companies and nine life
assurance companies with a market size of $196M.
TA Insurance’s plan is to grow its market share in all three
d. Availability of long-term mortgage for housing
development and long-term capital for investment in
existing businesses and creation of new businesses.
e. Favourable policies that encourage savings and
f. Development of micro insurance products for the lower
end of the market.
g. Deployment of cost effective mobile and web based
technology platforms for distribution of products and
payment of premiums and claims.
h. Strong regulatory environment that promotes a viable
insurance industry coupled with skilled professionals
working in the regulators office.
i. Investment in developing the technical and leadership
skills base of the industry in all areas.
j. Educating the public on the importance of insurance as
an income protection and risk mitigation tool. This is
vital in low income countries where insurance is seen as a
product tailored only for the needs of the upper and
middle income brackets.
Do you believe that claims fraud is an industry issue
currently, and if so, how is this being tackled?
Claims fraud is a major issue within Sub-Saharan Africa and
it is estimated that anywhere between 20%-30% of claims in
the short-term industry within Sub-Saharan Africa could be
fraudulent. To curb claims fraud an increased level of
cooperation is needed amongst insurance companies and the
other stakeholders including brokers, agents, claims
assessors, panel beaters, the regulator, loss adjustors and
finally the law enforcement agencies.
In Zimbabwe the issue of claims fraud is unfortunately not
being tackled seriously at an industry level but more at an
individual company level. The motor business is the most
susceptible to fraud followed by fidelity guarantee and it
would make sense to start by having a central database that
records the names of the individuals and organizations that
have committed fraud. The industry is currently scouting for
a system that will allow companies to input stolen vehicles,
names of the perpetrators and other pertinent information
that can be accessed by the relevant stakeholders.
Is the insurance industry faced with a shortage of qualified
human resources, and if so, in what areas of specialization?
How is the industry gearing up to mitigate the risk caused by
During the tough economic period of 2000-2008,
Zimbabwe lost a large number of qualified and experienced
insurance professionals to the region and to the UK.
Presently the industry is faced with a shortage of skilled
professionals in the following areas:
a. Risk assessment and mitigation
b. Loss adjustment
c. Specialized underwriting skills in engineering, liability
classes and marine
There is no coordinated approach by the industry to address
the shortage of skills in the country. However, the Insurance
Institute of Zimbabwe (IIZ) an industry training body offers
courses in insurance qualification starting from Certificate of
Proficiency (COP), Diploma in Insurance and Associateship
in Insurance. Additionally the local reinsurance companies
conduct training classes in different areas to enhance skills.
Zimnat Lion Insurance Company has taken a deliberate
approach to recruit a few skilled Zimbabwean insurance
professionals from the diaspora to enhance the team.
Can you elaborate on some of the product/service
innovations launched by your group companies in the recent
Some of the innovative products that the group has
launched over the last two years are:
Insure Go - the first of its kind third party motor
insurance product that is mandatory in Zimbabwe and can
be bought from selected supermarkets, fuel stations and
banks. The customer purchases an Insure Go package
which contains the insurance cover note and a scratch card.
To initiate insurance cover, the customer scratches the card
and uses the pin code on the card to register his/her
personal and vehicle details via SMS. Using SMS cellphone
technology and a mobile network gateway, insurance cover
is accepted upon client receiving an SMS confirmation from
Zimnat Lion Insurance.
Pundutso Weather Index Insurance - is a groundbreaking
weather insurance product introduced by Zimnat Lion
Insurance that gives farmers a cash payout in the event of
bad weather resulting in a poor harvest. The policies will
compensate the client for their input costs in the event of
adverse rainfall experience. The product is an innovative way
in which farmers can lessen the effect of unpredictability of
TA Insurance is one of only
2 companies in Zimbabwe
that have operations in all
three sectors of the
insurance space - short-term,
life and reinsurance.
Diaspora Funeral Cash Plan - It is a funeral protection plan introduced by
Zimnat Life Assurance targeted at Zimbabweans living in the diaspora. The
plan allows for the principal member to also cover his/her spouse, children,
parents parents-in-law living in the diaspora or in Zimbabwe. The policy
makes a lump sum payment of the sum assured upon the death of any of the
lives covered under the policy.
What role do you see technology playing in the growth of your company and
also that of the industry?
Technology can play a huge role in the growth of the industry and in our
group, especially in relation to making insurance accessible and affordable to
the uninsured and underinsured segments of the population. Globally for the
insurance industry, new technologies are significantly enhancing operational
efficiencies, increasing revenue opportunities and improving the customer
Some of the technological developments that can be a catalyst for growth of
the industry and TA Insurance Group are:
a) Proliferation of smart phones and tablets coupled with cloud computing
which provide instant access to the internet.
b) Adoption of mobile and web-based technologies to distribute products and
settle premium and claim payments.
c) The explosion of computing power and storage enabling the accumulation
and analysis of data - a trend often referred to as ‘big data’. Insurers who
can exploit this information for better pricing, underwriting and loss control
will have a distinct competitive advantage over their peers.
d) The growth of active sensors and devices connected to the internet which
is projected to reach 50 billion by 2020. Commercial insurers are already
using connected devices and sensors to develop risk and loss management
and improve productivity. It is also envisioned that by 2020 life and health
insurers will be using them propelled by a number of biotechnologies
available at the nanoscale level.
What role can the insurance industry play to contribute towards healthy growth
of the economy in sub-Saharan Africa ? Do you think there are any policy
changes required for this to happen?
The insurance industry can play a vital role in the growth of the economies in
Sub-Saharan Africa as evidenced by the correlation between the premium
levels and penetration rate in South Africa and the level of development. The
life industry in South Africa generated premiums of $22B in 2011 which
accounts for close to 80% of African life premiums.
With the right policies, the insurance industry in Sub-Saharan Africa can
become a large pool of domestic funds just as in South Africa for investment
in much need areas such as infrastructure (roads, rail, airports, ports, and
water), housing and energy.
Some of the following policies could be enacted:
a. Tax incentives for savings and investment products which would encourage
the purchase of these products.
b. Pension regulation making occupational pension contributions mandatory.
c. Tax deductibility for employee and employer pension contributions.
d. Provide incentives to financial services firms to expand into rural areas.
plan is to grow its
market share in all
three sectors of
pay claims in a
timely manner in a
market beset by
very tight liquidity
This meeting of minds has given birth to a new era in health
insurance in India, bringing with it the double protection of
preventive health added to insurance cover. It is a venture to
bring in a paradigm shift in health insurance from ‘post care’
to ‘prevention and wellness’. This ultimately is the core of
the Apollo Munich’s unique brand positioning - ‘Lets Stay
Towards this attempt, it has implemented AGILIS, an
integrated web-based software offered by Agile FT.
Through AGILIS, Apollo Munich has been able to sign up
new customers thereby gaining incremental revenue. It has
also achieved fast turn-around-time, a critical success factor
in the travel insurance industry.
Apollo Munich has provided Indian domestic/international
travellers a powerful on-line tool by which they can purchase
travel insurance in a variety of ways. Corporate customers
can issue policies at their end from the corporate portal.
Travellers can purchase their insurance policies either from
travel agents who have been given access to AGILIS or from
travel portals like MakeMyTrip.com. Branch office
employees of Apollo Munich at branch office can issue
insurance policies to walk in customers from the employee
portal. In all cases, the insurance policy is immediately
processed, can be printed and made available to the
customer in real time.
Health insurance is a highly competitive line of business
since it is a part of every general insurance company’s
portfolio. Travel insurance forms an integral part of the
health insurance portfolio. Travel is a high-growth segment
with international leisure travel expected to grow three times
while the domestic travel market is currently growing at
about 35%. The value of the Indian travel insurance
industry is estimated to be $236 million in 2009, according
Apollo Munich Health
Insurance, the association
between Apollo Group and
Munich Health, is a strategic
alliance to meet common goals
in healthcare and health
‘It complements Apollo’s
philosophy of ‘Prevention and
wellness’ and Munich Health’s
dedicated mission of ‘providing
affordable and innovative health
to Euromonitor International.
Domestic and international air travellers typically buy
insurance cover after they have purchased their travel tickets.
This is usually at the proverbial last minute when they have
very little time to seek an agent and buy travel insurance.
Even if they find a travel agent or visit a general insurance
company, it normally takes a few hours before the policy
document is provided.
In addition, the application forms are time consuming with
details such as medical history, passport and other
identification details to be filled. This affects the turn-around-
time, a factor that is critical for the success of the
business, as well as the convenience of purchasing the
In its endeavor to become a first-choice partner in the health
care sector, Apollo is determined to increasingly automate
processes, reduce human intervention and increase quality
and speed. Apollo Munich currently offers several insurance
plans - Easy Health Insurance, Personal Accident Insurance
and Easy Travel Insurance.
It chose Agile FT as its partner to automate its Easy Travel
Insurance Plan, a Short-Term travel insurance plan, with the
main target population being young people who are very
familiar with the existing travel insurance schemes available
in the market. The Individual Travel Insurance Plan covers
an individual of age between 6 months up to 70 years,
against any medical or non-medical emergency while
travelling and is valid for a specific number of days. Apollo
Munich offers the Easy Travel Insurance Plan in four
A secure travel insurance portal through which corporate
customers can issue their own policies. The issuing
company has to maintain a deposit with Apollo Munich,
which gets debited every time a new policy is issued.
Through the Agents Portal for travel agents.
Through travel ticketing websites like MakeMyTrip.com,
where travellers can buy the insurance policy along with
the air ticket by just click-checking a box.
Through branches which provide service to walk-in
The policy is valid either for the duration of the round trip
travel or 30 days from the date of booking. The decision to
use travel web sites as a distribution channel was to provide
an extended solution to airline clients. This has given the
company a new dimension to the already existing on-line
airline booking system.
shares his views
What is your vision for Apollo Munich?
Apollo Munich was licensed by the regulator in August
2007 and launched its first product in November 2007 on
the retail side. We now offer a bucket of products in
areas such as health, travel and personal accident
insurance for both retail and corporate and our goal is to
become a health insurer of choice.
At Apollo Munich, our core philosophy is ‘manage health’
and our vision is to become a significant player in the
health insurance industry, with our value proposition
being the ability to combine health care access and
What is the rationale behind the on-line health
Very few insurance companies currently offer on-line
health insurance with processes automated from
application to policy distribution.
By providing this service, we have actually been able to
increase the market size of the insurance industry as this
user-friendly facility has roped in many first-time
customers, many of whom have now made it a practice
to purchase insurance on-line whenever they travel,
which is something they would not have thought of
What was the main reason for selecting Agile FT?
We chose Agile FT as a partner as they possessed both,
the technology expertise as well as people who had a
deep knowledge of the insurance industry. Agile FT
offered us a blend of technology and domain expertise.
Without AGILIS we would not have been able to enter
into a partnership with MakeMyTrip.com.
While the primary focus of travel agents is on overseas
travellers, the focus of MakeMyTrip.com is on domestic as
well as international travellers.
During the launch of the Easy Travel Insurance Plan,
Apollo Munich had time constraints and was unable to
custom-build a solution to cater to the travel insurance
product. The company was therefore seeking an ‘off-the-shelf
’ product. “We already had a system in place which we
customised to suit our business needs. We decided to go for
AGILIS since there was no time to add a separate module to
the existing one,” says Ravinder Zutshi, Chief Technology
Officer, Apollo Munich.
A key differentiator that separates Agile FT from its
competitors is its domain knowledge. Apollo Munich
selected AGILIS over similar products because of Agile
FT’s proven expertise and domain knowledge of the
AGILIS is an integrated on-line IT solution designed to
automate all the functions of a general insurance company.
It acts as a decision support system for underwriting, claims,
reinsurance and accounting and, as a result, directly
enhances the business processes of an insurance company.
The solution is flexible in terms of defining new or revising
existing insurance products and facilitates dynamically
altering the process in time with the market conditions.
AGILIS has the ability to cater to all classes of the general
The front end interface is used to provide a choice to
travellers booking through MakeMyTrip.com of whether or
not they would like to purchase an insurance policy. It also
includes the facility of emailing the policy to the subscriber’s
The back end runs a validation engine and checks the
information (such as age, length of travel, countries of
travel) of the traveller. Most of the information is picked up
from the data provided on the tickets and compared to set
values. For example, the Easy Travel Insurance Plan is only
provided to customers who are less than 70 years old.
Anyone at and above the age has to go through the
underwriting process by visiting an Apollo Munich office.
After the validation, the application is passed through a
payment gateway, where the payment is extracted from the
customer’s credit card. In case of cancellation of a policy,
the refund is made to the customer using the same forms,
while the final transaction is settled between the travel
agents or MakeMyTrip.com and Apollo Munich at the
Within a few months of the launch of AGILIS, Apollo
Munich received encouraging feedback from travel agents as
they found the product easy to use. Their feedback has been
that AGILIS is customer friendly, easy to integrate into the
existing system, cost-effective and performs well on
underwriting and claims.
AGILIS also helped Apollo Munich decrease the turn-around-
time for issuing a policy to 2 minutes as compared to
15 minutes earlier. Purchasing travel insurance was suddenly
made very simple for travellers who were earlier used to
filling out lengthy application forms. For travellers who fit
the policy underwriting criteria, all they have to do is to fill
in their personal information on-line and the policy
document is sent to their email account, without any human
Apollo Munich garnered significant incremental business
with the addition of MakeMyTrip.com as a sales and
distribution channel, especially because it was one of the
early movers. The unique feature of this channel is that it
creates an impulsive buying decision for the travel portal
user who can avail an insurance policy by just click-checking
Apollo Munich gained significant benefits due to the
AGILIS implementation. In addition to simplifying internal
processes, using AGILIS also reduced the turn-around-time
for the issuance of policies, thereby setting an industry
benchmark which few insurance companies have achieved.
Being one of the early movers in providing travel insurance
policies in real time gave the company a substantial
advantage over competition and helped it to increase
incremental revenues significantly.
“We chose Agile FT as they
possessed both, the technology
expertise as well as people who
had a deep knowledge of the
- Krishnan Ramachandran
Chief Operating Officer
Apollo Munich Health Insurance
Social medium can be leveraged to track how the institution
is perceived and ancillary analytical tools are available to
enable them track trending topics and blogs mentioning
their institution. Since the medium is viral in nature, it is
imperative for the institution to include the tracking of such
perceptions in their overall CRM strategy.
Consider this. It is likely that most comments that a
consumer would put out there would be negative. Very rarely
does a consumer go out of the way to post a positive
comment, unless the service experience was exceptional.
Either way, the communication process needs to be captured
and responded to by either isolating the dissenter by
educating them in a public forum or advocating a supporter
by spreading the good word.
Customer’s who use the institution’s online services will also
be more likely to adapt to a new trend that is emerging -
where banks and insurance companies are integrating their
channels with social medium platforms. Take the example
of ASB Bank from New Zealand, which is credited for
opening the world’s first virtual branch on Facebook . You
can interface with them on Facebook on any topic ranging
from your account administration to originating an enquiry
for a new loan. Social media platforms that provide you
with the capability of building applications that enable
interaction are untested waters, but a surefire way of
ensuring that you are an interactive click away from your
Interestingly enough, we have also come across Insurance
Companies offering advisory services to their clients and
curtailing insurance fraud by simply checking out activities
of insurance claimants who had put in fraudulent claims.
Fraud detectives are scouring the social media for evidence
as a process of validating claims. A case in point was
reported by LA Times in January of 2011, of a disability
claim on account of a bad back being refused because the
claimant had boasted about completing a marathon on
Twitter and Facebook.
Financial institutions have their work cut out whilst they
figure out their communication and channel integration
strategy for social media platforms. At the very least, security
policies and systems will have to be re-examined once
channels are extended onto social media platforms.
Financial institutions will soon have to formulate their
customer relationship, communication, technology and
channel integration strategy around the functional building
blocks of social media platforms - identity, conversations,
sharing, presence, relationships, reputation and groups
(Kietzmann’s Honeycomb Framework).
It will not be long before we hear an outcry from CTO’s
saying “just when we had learnt the answers, they went
ahead and changed the questions”.
Agile Financial Technologies
Just when you had learnt the answers, they
changed the questions.
Social medium is still an unchartered territory for banks and
insurance companies - where the fear of the unknown has
restricted their leverage of the technology and limits their
ability to reach out to a new generation of customers who
view these platforms as a window to the world.
The way we communicate has changed with the advent of
social media and community forums becoming the channel
of choice for the customer to voice their opinions, seek
advice and post feedback.
Collaborative tools and content dissemination tools have to
adapt to this shift in behavior to equip the institution to
better manage their communication process.
How many of us now rely on Twitter, Facebook or LinkedIn
to find out breaking news, pose queries and even post
customer service issues? It is this shift in behavior that is
prompting financial institutions to examine how the
medium will impact customer relationships. Though
untested, social medium is definitely a channel that can be
leveraged to deal with customers. Institutions will have to
review their practices and also examine their processes
considering that social media interaction will bring forth a
convergence of their technology, customer relationship and
corporate communications teams.
Agile FT and
Global software solutions and services provider Zensar
Technologies (Zensar), has formed a strategic partnership
with Agile Financial Technologies (Agile FT) to strengthen
its position in the Banking, Financial Services and Insurance
This partnership will optimize Zensar and Agile FT’s
proficiency to meet the rapidly growing needs of the sector
and continue to remain customer centric by providing them
with their industry leading solutions and strong domain
According to Shefali Khera, COO-Designate for Agile FT
US, both companies have already begun engaging deeply in
multiple accounts and at various levels of demand
generation, solution architecture and market penetration.
The Middle East is one of Zensar’s key emerging markets
where it has a market leading position in the Enterprise
Application space in both Oracle and SAP solutions and has
created a strong footprint over the last seven years by
engaging with some of the region’s most prestigious
Manufacturing, Retail, Real Estate and Healthcare
Zensar’s business operations for the Middle East stem out of
their office in Dubai and will have multiple centres across
the Middle East to ensure that they are able to capitalize on
the major role the region plays in the overall growth strategy.
Harish Lala, Senior VP-MEA, Zensar Technologies says that
the partnership is of significance as the global experience
and delivery skills brought in by Zensar, combined with
Agile FT’s best of breed products for the BFSI sector, will
provide superior value to customer organizations.
“This partnership is an
important step towards re-emphasizing
the significance that
the Middle East market plays in
Zensar’s growth strategy.”
- Ganesh Natarajan
CEO and Vice Chairman
“The partnership while adding
enormous value to our potential
customers will also help us
generate a significant thrust in
- Kalpesh Desai
Agile Financial Technologies Inc.
626 RexCorp Plaza, Office No. 708
New York 11556
Tel : +1.917.722.1252
EUROPE, MIDDLE EAST AFRICA
Agile FinTech FZ-LLC
808-A, Business Central Towers
Dubai Internet City
Agile Financial Technologies Pvt Ltd
Tex Centre, N Wing, 3rd Floor
Chandivili, Andheri (E)
Mumbai 400 072, India
Tel : +91.22.425.01200
Agile Financial Technologies PTE Ltd.
20 Cecil Street, #14-01
Views expressed in this publication do not necessarily represent the views of Agile FT and the information contained herein is only a brief synopsis of the issues discussed herein. Agile FT makes
no representation as regards the accuracy and completeness of the information contained herein and the same should not be construed as legal, business or technology advice. Agile FT, the authors and
publishers, shall not be responsible for any loss or damage caused to any person on account of errors or omissions.