SKS. Process Innovation to make Microinsurance more Efficient and Effective. Microinsurance Conference 2007 Vishwanath Divya

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Microinsurance @ SKS Process Innovation to make Microinsurance more Efficient and Effective Microinsurance

Mission To provide financial services to the poor in a sustainable manner Current Outreach Over 12,00,000

1 SKS Process Innovation to make Microinsurance more Efficient and Effective Microinsurance Conference 2007 Vishwanath Divya SKS Empowers The Poor to Become Economically Self-Reliant Branch office SKS Mission To provide financial services to the poor in a sustainable manner Current Outreach Over 12,00,000 members Over 1450 crores disbursed Over 600 crores portfolio outstanding SKS Vision 10,000,000 poor families by March 2011

2 SKS Mission Sustained develop of our members through risk mitigation, using comprehensive and effective micro-insurance products Vision To be the most comprehensive and useful micro-insurance player for poor communities Microinsurance Usage As a tool for Poverty Alleviation As a tool for providing sustenance to the develop efforts As a tool for empower As a confidence building tool for Lenders and Investors As a means for Social and Financial inclusion of the disadvantaged

3 Primary Responsibilities Members Product Offering Health Insurance Composite Insurance Endow Scheme

4 ABHAYA (Loan Cover Insurance) Features & Benefits: 1. Policy Holder : SKS is the Master Policyholder for its members 2. Insured Event : Death due to any reason is covered under this policy 3. Insurance Coverage : Member & her Husband (if eligible) 4. Age Limit : years 5. Coverage period : 50 weeks 6. Sum Assured : Equal to Loan amount for each life Benefit: The outstanding amount is written-off Immediate relief to the family through Funeral assistance of Rs Final pay-out of an amount equal to Principal repaid by the member after adjusting it against the Funeral Assistance Product Offered to Type Features SWAYAM SHAKTI (Health Insurance) : The members of SKS and their families : Group Health and Personal Accident insurance : 1. Cashless treat or reimburse up to the maximum sum insured Hrs. hospitalization or Day care Procedures 3. Maternity (Institutional Delivery) expense covered 4. Pre-existing Illness Covered Payable Charges : 1. General ward - bed charges 2. Surgeon, Anesthetist, Medical Practitioner, Consultant, Specialist fees, Nursing expenses 3. Investigation charges 4. lcu, Oxygen, Ventilator Charges 5. Medical Consumables and Medicines

5 Challenges Need Assess: Felt Vs. Latent Product Design & Pricing: Require Vs. Capability to pay Partner Selection Impleation Awareness Creation Premium collection Claims Processing Event Validation/ Claim Authorization Docuation Benchmarking Service Delivery Channel Sustainability Incentive Product/Process Improvisation through member feedback S. No. Cost Levers 1Estimation of FA costs for each loan cover processed acost per client for loan cover insurance 2Estimation of FA costs for each claim raised afa costs for claim processing 3Allocation of admin staff costs at Area Office acost per member insured Estimation of stationary / admin costs per insurance 4claim 5Allocation of total HO staff costs acost per member covered bcost per claim raised 6Allocation of HO overhead costs acost per insurance cover created 7Allocation of Branch overhead costs acost per member covered bcost per claim raised Estimation of financing costs for time between payout to member and receipt of claim from insurance 8company afinancing charges per claim raised Cost Levers vis-à-vis possible intervention Cost (Rs.) Training of Field Staff, Insurance module for better tracking of Insurance Claims Total Intervention Training of Field Staff, Docued 4.11Manuals, Script for CGT Training of Field Staff, Pre-design Format for Declaration, Automated Claim 53.60registration and intimation 1.62 Automated Claim registration and intimation, Self attestation at Area Level, sending Scanned docu Insurance Module for claim processing 0.84and data handling Insurance Module for claim processing and data handling Electronic Claim Submission and Batch 72.69Processing using Insurance Module scope of (%) % 40% 70% 20% 50% 40% 60% 44% Revised me Costing nt (Rs.)

6 Potential Improve ~ Cost Levers FA cost for each loan cover claim process ed Stationar y / admin costs per insuranc e claim HO staff cost per claim raised Branch overhea d cost per claim raised Interest loss due to high turn around time Total cost for claim processi ng Total possible savings due to different intervent ion Key Features of the Software Integrated Module 1. Insurance Manage System 2. Financial Accounting System 3. Manage Information System 4. Customer Information System Web based application SQL database Hardware got updated OS selected was XP Pro VSAT & Dialup as mode of communication & data transfer User Role Defined Access Screen-Module-Role-User

7 Key Features of the Software contd Message Escalation system based on defined Turn-around period for a specific task (Task Pane for individual User) Flexible system to provide backend support for other Insurance Products Receipts generation in Vernacular language Efficient Reporting (semi-dynamic) Branch Rating Export feature to different applications like Excel, PDF, Word etc. Turn-Around Time Analysis Lag Time Analysis Time lag bet ween Deate of Death & Dat e of FIR Time lag bet ween Dat e of FIR and DC Receipt Lag Indicators Time taken in benefit delivery 86 Time taken in Claim set tle Old Average New Average M in. No. of Days taken M ax. No. of Days taken Total time taken

8 Attribute Ranking Top three attributes by area type Overall Rural areas Semi-urban areas 1.Timeliness of loans 2.Loan size 3.Interest rate 1.Interest rate 2.Timeliness of loans 3.Loan insurance 1.Loan size 2.Timeliness of loans 3.Group responsibility Source: Market Research Study done by EDA Rural Systems, New Delhi Urban areas 1.Loan size 2.Loan purpose 3.Timeliness of loans Evolutionary stages 1. All inclusive product with differential coverage 2. Advance Premium Pay 3. Automated Data Consolidation 4. Monthly Policy to Fortnightly Policy 5. Individual Insurance Certificate 6. Introduction of Funeral Assistance 7. Electronic Claim Submission 8. Batch processing of claims 9. Attestation authority to SKS 10. Standalone Claim processing to Real time settle

9 The Road Ahead. Exploring possibilities with Mobile Banking for First/ Renewal Premium Collection Due Premium Reminder New Product Information/ Marketing Claim Registration Claim Processing/ Tracking Support Claim Settle From Standardization to Customization Creating Best Practices in Microinsurance Space Impacting lives through comprehensive products Generating Livelihood using Microinsurance as a tool Becoming a World Class Insurance SBU (Small Business Unit) Empowering the Poor to Become Economically Self-Reliant SKS Microfinance Pvt. Ltd /1/1, Karama Enclave, Road No. 10 Banjara Hills, Hyderabad , India

Insurance Benefits

Insurance Benefits 2017-18 Insurance A practice or arrangement by which a company or agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a