MICROINSURANCE E - INNOVATION IN CTION FOR THE INSU INSURANCE - - PowerPoint PPT Presentation
e billion policyholders, a third e potential market of 3 billion seven times more than todays estimated market size 0 Insight (Nov 2009) loyds 360 MICROINSURANCE E - INNOVATION IN CTION FOR THE INSU INSURANCE SECTOR Presentation by
Presentation by Israel M Technical Director – Hollard On behalf of Jeremy Leac Divisional Director & Head: Presentation to the EF Micro-insurance, Lago
e billion policyholders, a third e potential market of 3 billion seven times more than today’s estimated market size” loyd’s 360
0Insight (Nov 2009)
rael Muchena Hollard Mozambique Leach & Head: Microinsurance EFInA Innovation Forum: agos, 22 Sept. 2011
develop micro-insurance income mass market
innovations
launching microinsurance
the insurance sector to nce products for the low- ct and channel llard in developing and ance products in Africa.
The largest privately-held insuran premiums of $2 billion & net profit of We generate >$170 million from th We operate as a single business with infrastructure and capabilities The leading independent bancassu brandassurance company ($400 m Hollard has a presence in 10 countr We and our partners have the leadin market with ~17% share (FinScope
rance group in the region, with a $130 million. the RSA low-income market. with both Short-term & Life licenses, surance ($130 million) and million) in South Africa ntries ding share of the SA funeral insuran 2007)
In South Africa 45% of the population
whilst formal cover growth has ex
insurance has not managed to pe beyond 1.5% of LSM 1-5 adults”
the specific risks they face. FinScope
Outside of SA, only 5% of Ghanaians Zambians and only 2% of the Nigeria
tion have some form of insurance:
re than 10% per annum since 2003 – s exceeded 20% annually. FinScope effort by industry… short-term penetrate the low-income market s” CENFRI, 2010 all business owners are insured against
ns have insurance, 6% of Kenyans an rian and Pakistan population have
word al zahr which also me
riscare) and hazard (from Arabic means dice
ues of low trust
g and service to lower segments d consumption
attack? attack?
units that are as small as possible.
language and product benefits explainable in simple terms.
aim to lower acquisition costs argeted ial that premiums be available in sible. documentation should be in simple its should be designed to be
and increase as that person progres
insurance needs can be overcom insurance products to other produc by the consumer
e needs of the individual change progresses. The relatively low awareness of ercome by attaching a meaningful products that are better understood
Micro-insurance value chain
Insurer
Affinity/Re l/Mob Partne
Distribution Risk management Back office Product design and origination
Well-s
Ill-su
ity/Retai
tners Retail/ Mobile
suit ed t o deliver value suit ed t o deliver value
he low-income market we have an hich includes more than 1-million fam waiting list.” CEO of FNB Hous
an estimated 9-million households families on the government’s housing
Definitely NEEDED “…I will need to get a two plate stove again” “…..”will need to get an extra job….” “…..start all over again” But MISTRUST of insurance Industry “It sounds good if they will keep their promises” Concerned that claims processes will be comp High content values relative to the household No need for liability cover Don’t use Mzansi – “demeaning”, “makes me
ain” ises” mplicated ld structure e feel poor” “annoys me”
tribution: l center, store, gazine etc llections: re account ims: low cost ners – king for ustry support
e MM yments nned yments 011)
TRANS Objective: (a) Collect premiums (e-ca Challenges: regulatory (vs e-ca Examples New Opportunities: MTN Mobile Mon CROSS – SELLING Objectives: Product upgrades/downgrades, new products Challenges: Disclosure, NTU rates Examples: “Please call me”, SMS advertisements New opportunities: mobi sites embedded “f Challenges Examples: Take It Eez loyalty model, Fundamo MNO- Holla
ch Points: ch Points: here to here to
CUSTOMER CONTACT Objective: Balances, statements, payment reminders Challenges: Cost of SMS (although coming down), Examples: PEP New opportunities: Zingback, Viral SACTIONS cash or real cash, airtime), (b) pay claims cash), frictional costs from Telcos les: Cover2Go.
d “free benefits” ges: Disclosure, Eezi / Hollard, Tigo / Trustco
llard (Pakistan)
Loyalty – Embedded Mobile Mo
nsure – Tigo Mobile, hana / Tanzania & rustco Namibia MTN – Hollar Group roll out
e Money Airtime deduc
lard Ghana & ut in process Zong – Adamlee L Pakistan
The low-income market is no l backwater – it is now a key po priority. Whilst there are challenges, th
New models and new thinking consumers will be hurt Rules will be needed to ensure the consumer, whilst allowing solutions.
political, business and social , there are also considerable isting insurance market ng will be required – pockets and ure insurers act in the interest of g Insurers to find creative
Agusto & Co. 2009. Insurance Agusto & Co Ltd January 2009 Akanbi, F. and Kolapo, Y. 200 and shrinking real sector’ in The 2007, Vol. 17, no. 19, p. 22 Bernstein, P. L. 1996. Against story of risk, New York: John Burt, C. and Gordon, F. 2008. SA’s statute books’ in Cover, A Cover Publications: Randburg
nce Industry Report, Lagos: 09.
The Punch on September 3, nst the gods: the remarkable hn Wiley.
, April 2008, Vol. 20, no. 11, rg, pp. 33 – 34.
could easily trip you up’ in section of the Saturday S
Convergence, Vol. 7, no Axius Publishing: Johann
acquisition for the insu Insurers’ Association
’ in the Personal Finance Star, April 10, 2010, p. 2 ‘The role of trust in The Journal for
nnesburg, pp. 116-119. ues in mergers and surance industry. Nigerian
Das, U.S., Davies, N., and Podp Issues in Financial Soundness WP/03/138, IMF: Washington. Dorfman, M. and Tippins, S. 200 approaches to risk management Lagos Organisation Review, M
Ergerue, P. M. 2003. Insurance issues in Nigeria. Mbeyi & Asso
FinScope, Eighty20 Funeral Ac
Irukwu – several works
dpiera, R. (2003). Insurance and ss: IMF Working Paper,
nt and insurance research’ in , Management Review Ltd, Lagos. 08, pp. 147-156. nce: an examination of emergent ssociates, Lagos
Access Frontier, CENFRI
factors limiting growth of Risk Shield, Lagos: Risk 100, July 2009, p. 20.
http://www.saarf.co.za/LS
Linden Press/ Simon & S
). ‘Operator identifies
isk Shield Ltd, Vol. 10, no. icles ards Measure (LSM) /LSM/lsms.htm invisible bankers, The Schuster: New York
Jeremy Divisional Director & Head: Hollard Insuranc jeremyl@hollard. Thabo Gum Assistant Principal: Hollard Insuranc thabog@hollard. Israel Muc Technical Director – Senior Adviser – Hollard israelm@hollard. y Leach Head: Micro-Insurance, urance Group hollard.co.za habo Gumbi ipal: Micro-Insurance urance Group hollard.co.za Muchena Hollard Mozambique Hollard International hollard.co.mz
ically, whilst SA was seen as one of leaders with MTN Banking, WIZZIT now Vodafone’s M-PESA, only the big banks are having substantial ccess with mobile banking. N has committed to the largest loyment of Mobile Money globally is seeing successes (and llenges) in a range of its countries Uganda, to Rwanda, to Ghana etc. llard has partnered with MTN Mobile ney to roll out the first voluntary bile money insurance programme ccessible through the cell phone with lections through mobile money – a istic solution.
igo says it is targeting the … four m the product” Ghana
million subscribers on its network Ghana Business News
ith ZONG Insurance, you do not require rance company for an insurance policy…… any simpler
ire any documentation or the need to visi cy…… Buying an insurance policy cann ler than this”
paid ZONG subscribers
balance
customers with affordable and accessible insurance solutions
coverage through mobile phon
immediate coverage as soon a premium deducted
through mobile phone for the first time in Pakistan