microinsurance seminar, karachi 28 nov 2011 eamon kelly
TRANSCRIPT
Microinsurance
Client Value - Case studies
Microinsurance Seminar, Karachi 28 Nov 2011
Eamon Kelly
Microinsurance is...?
Client Value is ...?1. What is client value and ways to assess it2. Value creation examples3. Conclusion
What about the Business Case ...?
Contents
Based on work completed by the Microinsurance Innovation Facility and my own experience
No perfect answer, most MI operators are still learning...
Background
Microinsurance vs Conv Insurance
Key Aspect Conventional insurance Microinsurance
Clients •Relatively low risk environment •Reasonable insurance culture
•Higher risk exposure/high vulnerability •Weak or no insurance culture
Distribution Channel
•Sold by licenced intermediaries directly to high/middle income or corporate clients
•Sold by non-traditional intermediaries to clients with little experience of insurance
Policy Features •Complex policy documents •Many exclusions
•Simple language •Few, if any, exclusions •Group policies
Premium Calculation & collection
•Often good statistical data •Pricing often based on individual risk characteristics •Monthly to yearly payments
•Little or no historical data •Group pricing •Very price sensitive market •Frequent and irregular payments
Enrolment process
•Often Voluntary •Enrolment via brokers, sales agents
•Mix of mandatory or voluntary sometimes with government involvement •Direct face to face enrolment
Risk control •Limited eligibility •Significant documentation required •Screenings, such as medical tests, may be required
•Broad eligibility or mandatory enrolment •Limited but specific controls are in place •Insurance risk included in premiums, rather than exclusions
Claims process •Complicated processes •Extensive verification documentation
•Simple and fast procedures for small sums •Efficient fraud control
1Assessing client value
Product and process design
How do products meet client needs in relation
to alternatives?
DemandWhat factors influence
the choices of low-income households?
Product useWhat is client
satisfaction, loyalty and feedback to improve
products?
ImpactTo what extent and how
microinsurance improves risk-
management and reduces vulnerability?
6
What is “Client Value”?
accessiblesimple
affordable
responsive
7
appropriate
Building on risk management preferences
PRODUCT• Coverage & sum assured• Exclusions & waiting periods• Eligibility criteria• Value-added services
ACCESS• Choice and enrolment• Information & understanding• Premium payment method• Proximity
COST• Premium to client income• Premium to benefit/cost• Other fees & costs• Cost structure and controls
EXPERIENCE• Policy administration & tangibility• Claims procedures• Claims processing time• Customer care
8
Client value assessment tool - PACE
1.1 Coverage, quality of service, exclusions and waiting periods
0.35
Covers appropriate risks from a client perspectiveIntegrates appropriate riders to main coverProvides adequate service quality (for health)Offers simple cover without many exclusionsProvides limited waiting period
1.2 Sum insured in relation to cost of risk
0.35Pays out adequate amount in relation to cost of riskDoes not put many sub-limits on specific covers
1.3 Eligibility criteria 0.15Is inclusive, does not exclude groups of people unintended...
1.4 Value-added services
0.15
Offers non-insurance benefits Offers preventive health services (for health)Offers value-added agriculture servicesTriggers positive behaviour changes
9
Unpacking one dimension - Product
10
Spectrum of Client Value tools
KPIs
PACE
Client Satisfaction Study
Market Study
Impact Study
MILK Client Math
11
2Value creation examples
12
PACE pilot testing
Kenya composite
• CIC• Pioneer• Britak• Jamii Bora• NHIF
India health
• ICICI Lombard – MG Swath Bima Yojna
• Yeshasvini• Bharti/AXA -
PWDS• VimoSEWA• Uplift• RSBY
Philippineslife
• FICCO• CARD MBA• CLIMBS• TSKI -
Microensure
13
Uplift in India: case study
Expanding member benefits • Hospitalization product changes• Network of over 300 care providers providing care at negotiated rates• Access to health initiatives• To be sustainable with volumes and technology
Claims administration• Education & empowerment versus timely payments
Product and performance improved over time• Claim Rejection ratio has decreased over time to 2% • Claims ratio increased to 70%• Renewal ratio has increased over time to 70%• Out of Pocket expenses have reduced over time • Reduction in claim cost about 3 million rupees in 2010
14
Philippines: case study
TSKI Product
Cover Amount Raised
Community Pricing
Includes borrower and
spouseDefinition of dependents extended
Exclusions => Increasing benefits
Documents Required
Improved product
Opportunities and trade-offs Many value creation opportunities, small
improvements that can make a difference
Balancing trade offs in a continuous improvement process◦ Cost vs Product, Access and Experience
Contextualizing client value
Product and/or market maturity matters!
15
