These slides were presented during the webinar on "Managing Partnerships in Microinsurance" conducted by the Facility on 1 March 2012. The webinar highlighted the stages of partnership, key points and strategies that can be used per stage, success factors and pitfalls, as well as real cases in partnership management.

1. WEBINAR ON
Managing Partnerships
In Microinsurance
1 March 2012
Presenter:
Kelly Rendek
Consultant
Presenter: Presenter:
Richard Leftley Jeremy Leach
CEO and President Consultant
MicroEnsure
Moderator:
Jasmin Suministrado
Knowledge Officer
Microinsurance Innovation Facility
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3. Profile of participants
More than 350 registered
By Region participants By Type of
Organization
By Years in
Microinsurance
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4. WEBINAR ON
Managing Partnerships
In Microinsurance
1 March 2012
Presenter:
Kelly Rendek
Consultant
Presenter: Presenter:
Richard Leftley Jeremy Leach
CEO and President Consultant
MicroEnsure
Moderator:
Jasmin Suministrado
Knowledge Officer
Microinsurance Innovation Facility
4

5. Introduction
• Managing Partnerships Study: “good” partnerships have
been identified as one of the key factors in the success of a
microinsurance program:
– What makes a “good” partnership?
– How do we define success for a MI partnership?
– What can we learn from the experiences of others to ensure
effective partnerships?
• Study included analysis of 7 cases, covering a range of
countries, products and partnership structures:
– South Africa: Old Mutual and Shoprite; Old Mutual Imbizo program
– Philippines: Pioneer Life and Catholic Bishops Conference
– Kenya: CIC and NHIF
– India: ICICI Prudential and MRIL tea company
– Peru: La Positiva and rural irrigation boards
– Pakistan: AKAM and FMiA
+ Hollard Insurance, RBAP, MicroEnsure
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6. The Partnership Lifecycle
Search Assessment and Design
Selection and Set
Up
Evaluation Implementation
Termination Maintenance
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7. SEARCH
• Identify a need or capacity gap within your own
organisation for which you need a partner to have a
successful MI program
– For example:
• an insurer seeking an aggregator for distribution
• an aggregator such as an MFI/mobile
operator/retailer seeking an insurer
• Identify potential partners to meet that need
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8. SEARCH
Another approach:
• Identify needs of external organisations for which you can
provide a solution
– For example, an organisation seeking growth opportunities
for which providing insurance might bring them more
customers
• Evaluate what would be required from an insurer for a non-
insurance entity to be interested in this opportunity
– For example:
• Commissions or profit share or other financial
compensation
• Risk mitigation for partner
• Added value to existing business of partner
• Meeting social or non-financial objectives of partner
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9. SEARCH
Examples
• Insurance addressing a need that an aggregator has.
This is where a partnership is most successful as both
organizations have an alignment of interests.
• For example:
o The credit risk of a retailer / bank‟s loan book affecting its credit
rating, therefore requiring an insurer to take the risk off its balance
sheet
o To incentivise spend / ARPU (average revenue per user) on its core
product by for example linking insurance to use of airtime (M-
insurance)
o Increased competition where insurance could allow an organization
to differentiate itself
o Added brand benefits as insurance shows it „cares‟ for its
customers.
o To outsource the procurement / service requirements to an insurer
such as on a disaster risk product
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10. SEARCH
Examples
• Consider what problem the product will fix
for your partners and what will motivate them
• Consider these companies in Ghana
concerned about what will reduce its wanted to have clients “loyalty” from
borrowers ability to repay loans; its subscribers measured by
death, funeral costs, market fires, increased ARPU and reduced churn
emergency hospitalisation
wanted to drive uptake of savings
10 accounts and average balance

11. ASSESSMENT and
SELECTION
• Include objective criteria:
– size, outreach, type of client base, systems capacity,
etc.
• Will the potential partner contribute sufficiently to
growth of the program?
• Aligning interests and objectives is crucial
• Trust and commitment are the most important factors
in maintaining a successful partnership
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12. ASSESSMENT and
SELECTION Examples
• Implementing health insurance in India
– Complex partnership model
MFI
Risk carrier
MicroEnsure Hospital network
– Need to consider the economics across the value chain
– McKinsey study showed that there were issues with how
health insurance was delivered in India
– New model was designed focused on fixing service issues
for clients and ensuring all partners needs were addressed
– This “new model” required critical mass of 50,000 people per
district
– Partners chosen based on ability to deliver scale
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13. ASSESSMENT and
SELECTION
• Appendices include sample tools such as
assessment questionnaires, checklists,
partnership agreements and communication protocols
• Checklists and other tools can be helpful at different
stages of the partnership, particularly at assessment and
implementation stage, but also for evaluation
• Involving a third party to facilitate partner discussions
can be more productive than self-assessment
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14. Sample Assessment
Questions
• How does this partnership fit with our respective organisational
missions and long-term goals?
• What is the purpose of the partnership? Do we have a common goal?
• What is the current level of trust between our organisations? Is the level of
trust high enough to encourage risk-taking?
• What are the risks to either organisation in this partnership?
• Who provides leadership for the project?
• How will the key roles or functions of the partnership be filled to ensure it is
successful?
• Are there clear lines of accountability for the performance of the
partnership?
• What is the financial participation/contribution of each partner?
• What are the non-financial contributions of each partner?
• Do all project members, including all levels of management, participate in
all critical decisions made in the partnership?
• How will service to clients be maintained if the partnership is terminated?
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15. Insurer Assessment
Checklist—RBAP/MABS
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16. DESIGN and SET UP
• Pre Contract Process – after deciding to work together
but prior to project implementation
• Provides foundation for formal or informal agreement, if
decide to go ahead with partnership
• but partnership may not actually proceed past this stage
• Goal is is to have a collaborative dialogue with partner that
develops trust, understanding and commitment
• Can use assessment questionnaire or checklist to guide
discussions
• This stage may include an initial MoU or Non-disclosure
agreement to capture the intended collaboration, which will
be formalised in a contract at the end of the process
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17. IMPLEMENTATION
Design and Set Up
1. Decide partnership structure
2. Develop appropriate incentive structure for all partners
3. Create joint business case
Need not be exhaustive,
But should be REALISTIC
Implementation And done in COLLABORATION
1. Clearly define roles and responsibilities
2. Finalise business plan
3. Agree on regular communications
4. Develop systems integration and reporting requirements
5. Formalise in final contract/legal document
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18. MAINTENANCE
• Effective communication is a key factor
Top-down
Informal Formal
Bottom-up
• Negotiating product features
– Collaborative approach to product development, even
if insurance risk borne by only one party
• Retaining commitment
– Recognise learning, even when financial progress is
incremental
– Flexibility and collaboration is key to managing
challenges
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19. EVALUATION
• When to evaluate if change is required?
– Agreed timeframes for review
– Sudden external change (eg, regulatory)
– Unilateral action from one partner
– Experience significantly varies from business
plan/expectations
• Internal evaluation
– Can use assessment questionnaire throughout
partnership cycle
• External evaluation
– Have third party perform independent evaluation
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20. Summary of the
Lifecycle
• Cyclical process
– easier at the beginning when everyone is excited about the
new venture
– harder and more challenging later on, as issues arise and
need to be solved
– for ongoing partnerships, it becomes a continuous cycle
• Trust and commitment develop through solving the various
challenges together
– a necessary part of the process for a sustainable partnership
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21. Case 1:
Hollard - Microensure
2008: International partnership
re-insurer for MicroEnsure international microinsurance
through a cell captive „underwriting manager‟ across
arrangement health, weather index insurance,
life and non-life products
• Whilst it remains early days, the partnership faced many challenges:
– Risk appetite differed between the organizations. As Hollard took
the insurance risk whilst MicroEnsure did the pricing, there was
misalignment of risk. This is now being restructured.
– Lack of clarity around the role as it was the first of its kind for both
organizations; it was Hollard‟s first multi-national microinsurance
partner.
– Distribution partnerships took much longer to take off than expected
so less exciting for the owners of the P&L
– No or limited overlap in countries, so communication
21 was tricky

22. Case 2:
Hollard - PEP
2006: Start of partnership
Now have sold 500,000 funeral
risk carrier for
funeral insurance insurance products large South African cash-based
retailer focused on low-income
product
market acting as distribution
channel
• Partnership has remained strong, despite challenges because of:
– Long term view of the market where both parties are committed to
getting it right for their customers and have „patient capital‟;
– Strong focus on relationship management at multiple levels of the
organisation, including a well functioning JV Board.
• Key is also buy in at operational level
– Joint decision making
– Alignment of financial incentives
– Common vision of the market
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23. KEY SUCCESS
FACTORS
• Clear understanding of the problem that the distribution partner
has, and how insurance is going to help fix it
• Understanding of the value partners bring and how this is to be
recognized and recompensed
• Complete alignment of vision and interest
• No one single factor that leads to success, but need to avoid
many different possible pitfalls
• Collaboration: each partner contributes strengths but also
compromises when necessary
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24. WEBINAR ON
Managing Partnerships
In Microinsurance
Presenter:
Kelly Rendek
Consultant
Presenter: Presenter:
Richard Leftley Jeremy Leach
CEO and President Consultant
MicroEnsure
Moderator:
Jasmin Suministrado
Knowledge Officer
Microinsurance Innovation Facility
24