putting clients at the center of the design and sales process determining client value global index...
TRANSCRIPT
PUTTING CLIENTS AT THE CENTER OF THE DESIGN AND SALES PROCESS DETERMINING CLIENT VALUE
Global Index Insurance Conference September 14th, 2015
Paris, France
Five key dimensions of client value in agricultural index insurance
2 |
Value for money
Value adapted in time and nature
Value through technology
Value through joining forces
Value through education
Client Value
Value for money: index insurance is an appropriate models in developing countries
3 |
Traditional insurance
Index Insurance with
subsidies
25 – 35%
Traditional insurance in developing countries
Index Insurance combined
with a meso-approach/light broker
Frictional costs
Payback to the farmer
Lower distribution costs
No claims handling costs
No adverse selection
No moral hazard
Public subsidies to foster farmers’ protection
- Higher distribution costs
- Higher claims handling costs
- Higher cost of support functions
- Distribution costs
- Claims handling costs
- Support functions
- Uncertainty loading
100%
50 – 70%
5-10%
5-10%
Value adapted in time and nature: index insurance can contribute to breaking the poverty trap cycle
4 |
Increased sensitivity to
adverse weather conditions
Poor yield/crop
destruction
No access to credit
Povertytrap
0 1 2 3 4 5 6 70
200
400
600
800
1000
1200
1400
Cost in $ by household in East Africa
Time in Months
Index insurance provides one of the most rapid payouts
* From a study in East Africa conducted by the World Bank Group
Inability to buy new entrants
Step at which insurance can break the cycle
Adapted in Time Adapted in Nature
Index insurance can contribute to breaking the poverty trap cycle
Selling of assets
Value through education: information campaigns are key
5 |
Reinsurer/ global insurer
Local insurer
Aggregator/Broker
Farmer
Levels of comprehension complexity
Development of models, technical expertise, and “geomatics”
Full understanding of model’s output and relevance to local market
Understanding of aggregated risk and capacity properly inform farmers
Clear understanding of event covered, frequency, cost and pay-out
The GIIF can intervene at every level
Value through technological progress: improvements in technology are revolutionizing the industry
6 |
First pilots with weather
stations
Data that allows for construction of
indices but with a high basis risk
MID-2000S END 2000S SINCE 2010S
Use of satellite imagery
New data available through satellite
imagery and allowing to
compensate for lack of granularity
Data science
Big Data revolution helps us design
the most appropriate
insurance products
Media
Academics
Brokers
FarmersGovernments
Value through joining forces: to tackle the food security problem, we all have a role to play
7 |
Distributors
International
Organizations
Joining forces: everyone has a role to play
Data Scientist
s
Meteorologists
Aggregators (e.g. banks, cooperatives
)
Reinsurers/
Insurers
Private Sector
Financial Institutions
Farmer’s associatio
ns
Thank you