The Facility and the Feed the Future Innovation Lab for Assets and Market Access (AMA Innovation Lab) at UC Davis, with support from EA Consultants, organised a webinar to officially present the "3-D" Client Value Assessment tool. Merging the Facility’s PACE tool with the AMA Innovation Lab’s calculations for Minimum Quality Standards for agricultural index insurance, this tool provides a multi-dimensional understanding of the value proposition for potential or existing clients. This webinar introduced the tool, outlined its relevance and application, and provided tips for practitioners and researchers on how to use it to assess the value of their products. Presenters: Tara Chiu (Feed the Future AMA Innovation Lab at UC Davis), Coralie Martin (EA Consultants) and Pranav Prashad (the ILO's Impact Insurance Facility). Moderator: Aparna Dalal (the ILO's Impact Insurance Facility).

1. 3-D Client Value Assessment
Webinar
March 29, 2018

2. Interfacing with the webinar system
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3. Introduction to webinar and speakers
3
Panelist:
Pranav Prashad
Senior Technical Officer
ILO’s Impact Insurance
Facility
Moderator:
Aparna Dalal
Senior Research Officer
ILO’s Impact Insurance
Facility
Panelist:
Coralie Martin
Financial Inclusion &
Climate Insurance
Specialist
EA Consultants
Panelist:
Tara Chiu
Assistant Director
Feed the Future AMA
Innovation Lab at UC
Davis

4. Global Action Network for agriculture
insurance established in 2014
‒ Diverse participants
Discuss challenges and suggestions for
“frontier issues” impacting agriculture index
insurance
Work across topics ranging from contract
quality, bundling and aggregation, customer
education, data, technology and embedding
insurance in public policy
GAN and Client Value
4

5. Both protective and productive aspects
‒ Protection against setbacks due to crop losses, smooth
consumption, prevent the sale of productive assets
‒ Access to credit & inputs- engage in “riskier” but on more
productive and lucrative farm activities
‒ Increased investment on the farm, which can aid with
higher production and income
• “Uplifting” examples from Ghana, Mali, Kenya, India
Value across all stakeholders
Sustainability for projects and programmes is key
True value for insurance
5

6. More objective
Challenges with assessing value of crop index
insurance
PACE + MQS
Why the need for a new tool?
6

7. 3-D tool development:
5 pilots
Peru
Senegal
Zambia
Ethiopia
Kenya
Feedback collected from diverse
regions and participants

8. IMPORTANCE OF EVALUATING VALUE
8

9. A quality index insurance contract is one that:
‒ Adequately protects farmers against income
fluctuations; and,
‒ Can allow farmers to avoid costly coping
mechanisms, both before and after a shock.
With a low-quality contract, the worst thing
that can happen gets worse.
What is a quality contract?
9

10. Farmers misunderstand the terms of the contract.
Farmers don’t know the payout mechanism
(especially with products linked to loans).
Payouts come much later than farmers expected,
which can lead to negative coping mechanisms.
Farmers don’t know they’re insured.
Poor indices fail to pay out when farmers truly
have a loss that was intended to be covered by
insurance.
Common issues from the field
10

11. BEFORE: to identify and avoid potential pitfalls
in advance.
DURING: to identify opportunities to address
existing problems or problems that may
emerge in the future.
SCALING: to ensure quality and value are
maintained before scaling up.
Importance of evaluating value
11

12. DONORS: Evaluate whether donor funds are
being effectively spent; do no harm.
INSURERS: Assess the the product to see if
improvements can be made to make the
product more sustainable.
PUBLIC SECTOR: Evaluate whether public funds
are well spent, especially considering the
opportunity costs.
Who can use this tool?
12

13. The 14 indicators of client value
Design
Distribution
Delivery
1. Index reliably predicts farmers’ experience
2. Covers appropriate activities
3. Covers appropriate risks
4. Enables productive investment decision-making
5. Minimizes gaps in coverage
6. Covered farmers are adequately informed of product details
7. Staff and agents are adequately trained, incentivized and supervised to inform
clients and sell responsibly
8. Payment processes minimize liquidity constraints
9. Product is inclusive
10. Product delivers adequate coverage for money
11. Benefits delivered in a timely manner
12. Procedure to deliver benefits is reliable and understood
13. Provider is responsive and proactive about questions, problems and complaints
14. Covered farmers receive evidence of coverage

14. Assessing client value
Each indicator translates an important element
of client value into an output that is measurable

15. Index insurance has invisible
traits not easily visible to the
consumer, and can take years
to be observed.
As a result, consumers can
easily be taken advantage of
with poor products.
This kind of unregulated
market can reach an
equilibrium with low quality
insurance, and low demand.
Indicator 1: Reliable prediction
15
Photo credit: International Livestock
Research Institute

16. At a minimum: “Do no harm.”
It is more expensive to make high-quality
insurance products, and it can take years before
an insurance payout—or a lack of one—makes
clear that their insurance contract is low quality.
Many publicly subsidized index insurance
products available in developing economies offer
little more protection to farmers than a lottery
ticket. We can do better.
For individual farmers, the stakes are high.
Need for Quality Standards
16

17. Minimum Quality Standards are an objective
measure of index insurance quality to easily
compare how an index insurance contract
compares to having no insurance.
Would farmers be better off without the
insurance, or with it?
If we can determine that a household would be
better off economically buying the insurance,
then we can say that the insurance contract
meets Minimum Quality Standards (MQS).
Minimum Quality Standards
17

18. Without MQS, a perfectly good tool and high-
potential markets will be destroyed.
Bad products drive out good products.
A long-term perspective demands investment
in responsible product development (that
meets or surpasses MQS).
Without MQS, poor products can ruin
reputations and destroy the potential market.
Minimum Quality Standards
18

19. CONDUCTING A 3-D ANALYSIS OF
CLIENT VALUE
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20. The 3-D Tool
Dimensions Indicators
Data
Sources
Information
Required
Measurement
Output
Score
• Admin data
• Management
Interviews
• Sales staff /
agents
interviews
• Farmers
Interviews
Information
to obtain
from each
data source
for each
indicator
Elements
measured to
determine
scoring for
each
indicator
0: Poor
1: Average
2: Strong
14
Indicators of
client value
Design
Distribution
Delivery

21. The 14 indicators of client value
Design
Distribution
Delivery
1. Index reliably predicts farmers’ experience
2. Covers appropriate activities
3. Covers appropriate risks
4. Enables productive investment decision-making
5. Minimizes gaps in coverage
6. Covered farmers are adequately informed of product details
7. Staff and agents are adequately trained, incentivized and supervised to inform
clients and sell responsibly
8. Payment processes minimize liquidity constraints
9. Product is inclusive
10. Product delivers adequate coverage for money
11. Benefits delivered in a timely manner
12. Procedure to deliver benefits is reliable and understood
13. Provider is responsive and proactive about questions, problems and complaints
14. Covered farmers receive evidence of coverage

22. The 14 indicators of client value
Design
Distribution
Delivery
1. Index reliably predicts farmers’ experience
2. Covers appropriate activities
3. Covers appropriate risks
4. Enables productive investment decision-making
5. Minimizes gaps in coverage
6. Covered farmers are adequately informed of product details
7. Staff and agents are adequately trained, incentivized and supervised to inform
clients and sell responsibly
8. Payment processes minimize liquidity constraints
9. Product is inclusive
10. Product delivers adequate coverage for money
11. Benefits delivered in a timely manner
12. Procedure to deliver benefits is reliable and understood
13. Provider is responsive and proactive about questions, problems and complaints
14. Covered farmers receive evidence of coverage

23. Example: Indicator 2. Covers appropriate
activities
Dimension Indicator Data source Information required Measurement output SELECT
SCORE
DESIGN
2. Covers
appropriate
activities
Interviews with covered
farmers
Farmers' perception of a)
whether the crop is relevant
to their household income,
in comparison to their other
activities and b) whether the
investments it requires are
high, in comparison to their
other activities.
0: The crop is neither
relevant to households
income, nor does it require
high investments in
comparison to other
activities
1: The crop covered is
relevant to households
income, OR requires high
investments in comparison
to other activities
2: The crop covered is
relevant to households
income AND requires high
investments in comparison
to other activities
2
External sources (e.g,
economics or agricultural
research institute, publicly
available data, etc)
Information on importance
of crop(s) or livestock for
farmers' livelihoods, and
investment needs in
comparison to other
activities.
Management interview Previous evaluations of the
relevance of the crop(s) or
livestock covered in
comparison to alternatives.

24. Giving a voice to the end customer
The indicators
take the
perspective of the
client and rely
heavily on client
interviews

25. Indicator 6. Covered farmers are
adequately informed of product details
Dimension Indicator Data source Information required Measurement output
SELECT
SCORE
DISTRIBUTION
6. Covered
farmers are
adequately
informed of
product
details
Interviews with
covered farmers
Recall among covered
farmers of whether they
are covered, the crop(s)
covered, events triggering
a payout and product
limitations
0: Less than 75% of
covered farmers are aware
that they have insurance
for the covered crop and
risk
1: At least 75% of covered
farmers are aware they
have coverage for the
covered crop and risk
2: At least 75% of covered
farmers are aware they
have coverage for the
covered crop and risk, and
understand that payouts
can be above or below
individual losses.
2

26. A holistic approach to client value
Beyond pure product
features, the 14 indicators
consider the broader
product value proposition,
the context in which the
product is offered, and
the quality of the
processes implemented
to deliver the product to
smallholder farmers

27. Indicator 13. Provider is responsive and
proactive about questions, problems, and
complaints
Dimension Indicator Data source Information required Measurement output
SELECT
SCORE
DELIVERY
13. Provider
is
responsive
and
proactive
about
questions,
problems,
and
complaints
Management interview Available resources /
mechanisms for feedback
and questions from
covered farmers and use
of those mechanisms;
protocol for
communicating with
farmers after purchase
0: There is no known,
formal mechanism in
place that effectively
addresses complaints
1: There is a known,
formal mechanism that
effectively addresses
complaints
2: There is a known,
formal mechanism that
effectively addresses
complaints in place, and
it is used proactively to
communicate with
farmers and inform
product improvements
1
Interviews with covered
farmers
Awareness of available
resource(s) and
perception of whether
these resources are
effective in resolving
issues.

28. The main steps of a 3-D assessment
28
Preparation
Data
collection
Data
analysis
•Clean datasets
•Analyze survey and interview
results
•Obtain scoring
STEP
02
STEP
03
STEP
04
STEP
05
STEP
01
Project
Planning
Recommendations
 Define scope and
objectives
 Identify key stakeholders
 Define timelines
 Create workplan
 Prepare training material
 Planning of field trip
 Identify data sources
 Prepare instruments
 Train survey teams
 Conduct interviews
 Desk research
 Collect administrative
data
 Clean datasets
 Analyze survey and
interview results
 Obtain scoring
 Review strengths and
gaps highlighted
 Obtain feedback
 Formulate
recommendations

29. The 3-D Analysis “Toolkit”
29
Document Planning Preparation Data Collection Data Analysis
Recommen-
dations
3-D Technical Guide
3-D Tool
3-D Workplan
3-D Administrative
Data Checklist
3-D Interview Guides
MQS Calculation
Sheet
3-D Working
Template
3-D Report Template

30. Tips from the 5 pilots
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Ensuring that a sufficient number of farmers
from different geographic areas are interviewed
Communicating clear and complete data
requests early on
Ensuring adequate training and supervision of
survey teams
Involving stakeholders throughout the process

31. 31
Panelist:
Pranav Prashad
Senior Technical Officer
ILO’s Impact Insurance
Facility
Moderator:
Aparna Dalal
Senior Research Officer
ILO’s Impact Insurance
Facility
Panelist:
Coralie Martin
Financial Inclusion &
Climate Insurance
Specialist
EA Consultants
Panelist:
Tara Chiu
Assistant Director
Feed the Future AMA
Innovation Lab at UC
Davis
3-D Client Value Assessment

32. Through the year, we will share lessons and
experiences from the past, examine the
current trends, and present ideas for the
future
Stay tuned for more webinars, events and
publications to mark the anniversary
10 years of Impact Insurance
32
The ILO’s Impact Insurance
Facility is celebrating its 10-
year anniversary in 2018!

33. Contact us at:
Thank you!
With generous support from:
impactinsurance@ilo.org
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