MicroEnsure Overview: by the Numbers

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2 MicroEnsure Overview: by the Numbers Founded in 2002 and largely grant funded; 2007 Bill & Melinda Gates 2012 conversion to for-profit social enterprise Investors: IFC, Omidyar Network, Sanlam, AXA Design, implement and operate micro insurance products worldwide 42+ million customers in Africa/Asia 85% of customers are new to insurance Cover various classes of risk: life, inpatient/outpatient health, crop, political violence, micro asset, accident/disability, slum clearance 50,000 claims paid in past year 90 banking and microfinance partners 70 insurance partners 12 telecom partners 4-Time Winner of Financial Times/IFC Awards

3 Ghana: where it all began! MTN paid for insurance Tigo free insurance >250k paid 3.4m subs 8.8m subs <10k insured 1m+ embedded MTN had much larger client base Started with paid only Tigo achieved much higher paid customer base over same period starting with embedded

4 Concept: working with telcos Clients do not wake up wanting to buy insurance but they do wake up worried about the risks they face. Telco s suffer from pressure on ARPU, sim switching and high churn We aim to combine these two facts to create a win-win Phase 1: introduce free insurance Telco pays premiums for clients that spend a minimum amount of ARPU each month The more ARPU you spend the more insurance you earn next month Clear KPI s with product closed rapidly unless indirect revenue gains exceed costs Phase 2: freemium upsell Having paid claims quickly in Phase 1 we normally see 25%+ clients willing to pay a small fee to retain the free product but add cover for an additional family member This gets people paying for insurance whilst also retaining the loyalty benefits Phase 3: retail upsell We introduce a range of products to the market we have created leading to direct revenue for the telco & drives usage of mobile money platform

5 Airtel Africa: major deployment of free insurance 8 million new enrolled policy holders

6 Product Example Ghana 3 for Free Phase 1 January 2014 Monthly Recharge Life Cover Accident Cover Hospital Cash GHS GHS 250 GHS 250 GHS 25 GHS GHS 500 GHS 500 GHS 50 GHS GHS 1,250 GHS 1,250 GHS 100 GHS 50 and up GHS 2,500 GHS 2,500 GHS 150 Phase 2 November 2014 Double Cover pay GHS 1 per month to double your 3 for Free Cover: enjoy up to GHS 5,000 in life, accident cover and GHS 300 hospital cash Family Cover pay GHS 3 per month to double your 3 for Free Cover and give them same coverage to a loved one

7 Role & Responsibilities across value chain Partner Value Chain Airtel MicroEnsure Product marketing (ATL/BTL), monthly subscriber data, insurance premium payment, Tier 1 customer service Product & Process Design, Training, Customer Field Engagement, USSD/SMS, Tier 2 Customer Service, Policy Administration, Claims Management, Impact and Risk Monitoring, KPI Measurement Insurance Company Product and Pricing Approval, Underwriting, Local Risk Carrier, Regulatory Liaison

8 Currency Did it work? ARPU Impact ARPU Comparison Insured vs Control Insurance Launched Oct Nov Dec Jan Feb Mar Apr May June There is a clear impact on ARPU for insured customers Impact is high during the month of subscription and reduces gradually over time. Control All Insured

9 Three for Free: effect on recharge 2 nd Quartile ARPU 3 rd Quartile ARPU 4 th Quartile ARPU Oct Nov Dec Jan Feb Mar Apr May Oct Nov Dec Jan Feb Mar Apr May Oct Nov Dec Jan Feb Mar Apr May Control Insured Control Insured Control Insured Low ARPU customer behaviour is by far the most impacted by free insurance product The three months from launch saw a uplift in revenue for the Telco Again there is consistently higher revenue from those enrolled than those not enrolled in insurance product Biggest uplift was seen in low ARPU customers 23% of those auto enrolled who previously spent under $2 now spend above $2 threshold - significant affect on ARPU & revenue

10 Churn Impact Churn by Country Country Churn of Insurance Subscribers Churn of Overall Customer Base Ghana 0.22% 6.2% Nigeria 0.04% 5.9% Burkina Faso 0.29% 6.1% Niger 1.03% 4.2% Madagascar 0.07% 5.6% Churn is significantly lower for insurance subscribers, even when some customers are automatically enrolled (as in Ghana, Burkina Faso, and Niger).

11 Looking back There was a positive business case for all stakeholders including the client Free insurance did help educate the masses We were able to upsell the majority However the model is a really hard sell for the telco having to place a big bet before finding out if it worked We needed a way to reduce the risk for the telco for future deployments

12 Telenor Suraksha - India Case Study

13 Timeline MicroEnsure had worked with Telenor in Asia before (Grameenphone, TP, easypaisa etc) We were contacted in June 2015 to help create a loyalty product Data gathered in July and detailed business case created by MicroEnsure for Telenor Go-decision made in August by Telenor We had eight weeks to build and implement Product launched end of October 2015

14 Telenor s strategic focus 1. Gain market share: new SIM cards are provided with two months free insurance. They are then offered a target top up amount in order to maintain free cover. 2. Drive ARPU: all existing customers are made a Target offer, they can opt in but to qualify for insurance they have to increase top up and hence this drives revenue. 3. Rebrand from Uninor to Telenor, the brand that cares. The business case for this product is therefore immediate and at the individual subscriber basis.

15 Telenor Suraksha Product Overview No documentation - No medical exam - No age limit - No exclusions Product type Life insurance paying a lump sum in the event of death due to any cause Age limits Minimum 18 years with No maximum age cap Enrolment channels Branded Retail, POS, SMS, USSD, IVR & Call center Claim settlement turnaround time Within 7 days of document completion Penetration Entire market in 68 years : Around 46 Mn (3.9% of total population) Suraksha in 150 days : Over 20 Mn Customers Insured clients profile 100% prepaid subscribers, most of them living in rural areas. Over 95% of all clients never had any form of insurance before Recharge Slab (for Target List generation) 1 49 > Rs. 20 Incremental Recharge > Rs. 20 Incremental Recharge > Rs. 40 Incremental Recharge > Rs. 50 Incremental Recharge Insurance Cover Min. Insurance of Rs Post Rs. 5000, based on Actual Recharge done. Actual Recharge Amount * 100 Actual Recharge Amount * 100 Actual Recharge Amount * 100

16 Lessons from Suraksha Clear strategic objectives with measurable targets results in the best outcome for all There is strong demand for protection products in India people are worried about the risks they face Setting individual targets helps take the business case down to the individual subscriber removes the big bet for telco Next step upsell to freemium and OTC products; we will find out how much the clients really understand!

17 Thankyou!