- ostraa conducted research using human-centered design methodology to understand perceptions of risk and inform the design of their mobile-based micro-insurance product for low-income customers. - Interviews revealed that financially vulnerable customers are interested in risk mitigation products but barriers like cost, complexity, and access limit ownership. - Participants supported micro-insurance and provided insights that will help ostraa design messaging and features addressing real needs to test and launch an affordable product.

1. www.ostraa.com
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Insights and Implications from an ostraa Research Venture
Carolyn Hall McMahon & Elizabeth Tutella Straghalis
January 2016
PURSUING INNOVATION IN
AFFORDABLE INSURANCE:
MOBILE NATIVE
MASS MARKET
MICRO-INSURANCE™
Abstract
ostraa pursued a hybrid research initiative aimed at exploring perceptions of risk and chal-
lenging assumptions in its product and distribution design. Using an intensive, human-cen-
tered design methodology, the research team aimed to better understand people’s values,
attitudes, and behaviors in relation to the problems they face and to gauge specific reactions
to and suggestions for a new ostraa product offering. Researchers conducted in-person, in-
depth interviews with the goal of achieving the following research objectives:
The research revealed deep insights about people’s perceptions of risk and practiced mitiga-
tion techniques. The data suggests strong support for the hypothesis that financially vulner-
able customers are interested in owning risk-mitigation products. Practical design implica-
tions, based on participants’ articulated fears and aspirations have set the stage for the test-
ing and launch of a tailored product whose messaging and features address real, felt needs.
An overwhelming customer familiarity with and demand for affordable insurance policies was
both striking and promising for the future utility of an ostraa offer.
1. To specifically quantify and size the perception of risk;
2. To understand perceived risk hierarchies and desired benefits in low and
moderate income households so as to inform final product design;
3. To understand the perceptions and challenges related to
messaging around free insurance through a mobile device;
4. To quantify around which key indicators we will use on an on
going basis to measure Impact.

2. Pursuing Innovation in Affordable Insurance | January 2016
CONFIDENTIAL REPORT
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© ostraa
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TABLE OF CONTENTS
Introduction
ostraa: A New Social Venture
A Need for Research
Methodology: A Hybrid Approach
Review of Literature
ostraa’s Central Hypothesis
I4
Methodology
Human-Centric Design: A Rigorous, Qualitative Method
I4
Methodology
A Commitment to Social Impact
Findings
The Risk Game: Results
Top Research Insights
Perceptions
Values
Behaviors
Product Design Recommendations
Features
Messaging
Measurement
Conclusions
Validating Desirability, Debunking Barriers
Questions for Further Research
I4
Interviews in a New Geography
Market Research – A Larger Consumer Panel
Pilot Test with Strategic Partners
Appendix
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INTRODUCTION
ostraa: A New Social Venture
ostraa is the first mobile native, mass market, micro-insurance company in the United States. Its goal
is to harness the power of mobile technologies to offer prepaid phone customers new value added
services that create meaningful social benefit for the customer and sustainable long term customer
relationships for ostraa, partnering insurers and mobile operators. The model functions by delivering a
suite of free insurance products to prepaid mobile phone users in return for the renewal of their plan.
After months of enjoying free insurance, customers have the option to purchase more coverage at a
discounted rate.
ostraa pursued a hybrid, customized research initiative aimed at exploring perceptions of risk and chal-
lenging underlying product assumptions. The research began with a thorough sweep of the existing
competitive landscape. The research team conducted a desk analysis of program evaluations and mar-
ket segmentation studies in the areas of financial capability and access, microinsurance, and mobile
phone adoption and usage. Secondary sources were examined to determine current information avail-
able on the topic of financially vulnerable households’ interest and take-up rates of risk mitigation
products, specifically insurance policies.
A Need for Research
Still in its nascent stages, ostraa set out to conduct substantive behavioral economic and human cen-
tered design research to address four primary issues.
Research Objectives:
1. To specifically quantify and size the perception of risk;
2. To understand perceived risk hierarchies and desired benefits in low
and moderate income households so as to inform final product design;
3. To understand the perceptions and challenges related to messaging
around free insurance through a mobile device;
4. To quantify around which key indicators we will use on an ongoing basis
to measure Impact.

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METHODOLOGY:
A HYBRID APPROACH
Review of Literature
A literature review focused on the perceived interest, access, and ownership of insurance as a risk-mit-
igation tool in financially vulnerable households. Specifically, the research focused on both term and
cash value (whole) life insurance products, with limited focus on health insurance. The scan suggested
that overall, households are interested in owning life insurance, and that an opportunity exists to increase
rates of ownership. According to the 2013 Survey of Consumer Finance, the percentage of all families
holding cash value life insurance policies has steadily declined from 35.5% to 19.2% over the years span-
ning 1989-2013. On average, 13.4% of households in the two lowest income quintiles held cash value
life insurance policies, compared to 31.6% in the upper three quintiles.1
Interestingly, from 2010-2013,
households headed by single parents were more likely to take on a new cash value life insurance policy,
increasing by 5% despite a decline in coverage in other groups.2
The Bureau of Labor Statistics Consumer
Expenditure Survey (2010) reported that the households in the lowest two quintiles spent on average
$89 and $148, respectively, on life insurance premiums per year. Despite limited incomes, lower income
households demonstrated demand for life insurance products in a period of overall decline of demand
as a whole.
Many studies noted product complexity as a common barrier to wider adoption. Ernst & Young’s 2012
Global Insurance Survey highlighted the need for insurance companies to respond to customer demands
to simplify products as a way to build customer retention. This advice runs concurrent with needs assess-
ments of low-income household financial products. Studies demonstrate that in the face of complexity
and or hassle in a product or service, paralysis in decision-making ensues, particularly when scarcity
of time or money are at play. Cutting out unnecessary complexity and steps has been shown to be
universally appealing.3
ostraa’s Central Hypothesis
Financially vulnerable consumers are interested in owning risk-mitigating
products, but factors such as cognitive biases, cost, complexity, and barriers
to access impede ownership.
1
BLS Consumer Expenditure
Survey Charts, 2010 – 2013.
2
Ibid.
3
Driving Innovation in Financial
Services, Ideas42. 2014.
A need to substantiate this secondary research with rigorous qualitative interviews emerged. Once
the preliminary landscape review was completed, a tailored human-centered research approach was
designed to assess ostraa’s central research hypothesis:
SEE FULL REPORT FOR MORE

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ostraa RESEARCH TEAM
Carolyn Hall McMahon is an independent Finan-
cial Inclusion consultant, focusing on human-cen-
tric design, with expertise in managing complex,
multi-stakeholder programs in the fields of finan-
cial empowerment, innovation, and leadership.
Her current work leverages the I4
Human-Cen-
tered Design framework to guide the messaging,
design, and measurement of new financial prod-
ucts for the U.S. market. Previously, she oversaw
strategy and operations for the Fletcher Leader-
ship Program for Financial Inclusion, an interna-
tional executive fellowship for financial regulators,
and as an Innovation Strategist for D2D Fund, a
U.S. financial services nonprofit, where she drove
the organization’s work on mobile financial tech-
nology. Carolyn managed the Microtest Impact
Study for 2010 for ACCION USA and served as a
translator for Kiva.org. Carolyn holds a Master’s
degree in Development Economics and Conflict
Resolution from The Fletcher School at Tufts Uni-
versity and a B.A. in Peace and Conflict Studies
from the University of California, Berkeley.
Elizabeth Tutella Straghalis is a Financial Inclusion
and HCD Consultant. She has 12+ years of expe-
rience in commercial banking, community eco-
nomic development and human centered research
and design. She previously served as a Senior
Strategist at D2D Fund, focusing on the research,
design, and testing of new financial products for
financially vulnerable households. Prior, she spent
seven years working in the financial services sec-
tor in risk management roles. In addition to her pri-
vate sector experience, she also spent time in the
community economic development field, working
as a Program Manager for a Boston-based Com-
munity Development Corporation. Her graduate
work focused on increasing financial access for
East Boston’s Latina immigrant mothers through
community ESOL programs. She holds a Mas-
ters in Community Economic Development with
a specialization in Microfinance from Southern
New Hampshire University’s School of CED, and a
Bachelors of Political Science and Economics from
the College of the Holy Cross.
Carolyn Hall McMahon Elizabeth Tutella Straghalis
THANK YOU
We appreciate your interest.
For more information, please contact:
Maximilian Weiner
maximilian.weiner@ostraa.com
Ostraa and the authors extend sincerest thanks to each interview participant, whose time, generosity,
and candor were foundational to this research endeavor. Similarly, they would also like thank Abraham
Espinosa and Assemble Studios for their time, patience and insight whilst providing the design and
layout for this report.