SAJIDA Foundation. Continual product refinement as per clients' needs. 10 th International Microinsurance Conference th November 2014

Transcription

1 SAJIDA Foundation Health, Happiness & Dignity for all Continual product refinement as per clients' needs 10 th International Microinsurance Conference th November 2014

2 SAJIDA Foundation 1987: Established informally as a private family funded charity 1993: Formally started its operations as a non-profit institution Creation of SAJIDA was driven by founder s firm belief in Corporate Social Responsibility SAJIDA owns 51% share of Renata Limited, one of the leading pharmaceutical companies in Bangladesh; previously know as Pfizer, Bangladesh

3 Microinsurance SAJIDA S core microinsurance product is called Nirapotta (Safety net) A comprehensive microinsurance program for microfinance borrowers was established in 2006 to provide social protection and security It addresses basic lifecycle needs of the poor that include health costs, death costs, educational expenses, disaster loss and other financial risks; this is mandatory for SAJIDA borrowers

4 Nirapotta Premium is Tk. 250 ($3.13) to Tk 1,050 ($13.13), depending on size of loan disbursed and loan tenure Premium covers up to 5 family members Additional premium charged for enrolment of additional family members Insurance term is same as loan term (6-24 months)

5 Nirapotta Benefits Free LEGAL Consultations Upon DEATH, $62.50 cash assistance and loan waiver up to $ Financial assistance of $6.25 to $50 for HEALTH treatment Financial assistance of $125 for FIRE disaster EDUCATION scholarships of $3.75 to $6.25 per month for meritorious students Nirapotta Making family life safe with very minimal fees Free Normal Delivery and Cataract operation at SAJIDA hospitals SAJIDA Bondhu providing door to door basic health care services

6 Timeline of Micro-Insurance Program Prior to 2006 Credit insurance, education program and health program were operating as independent programs 2006 HELP (Health, Education and Life-Security Program)- Life & Credit Insurance, Education and Health activities collaborated to form the micro insurance program Cash benefit along with loan waiver provided Hospital discounts introduced; a fixed portion of premiums paid to hospitals; hospital-based health insurance restricted to SAJIDA hospitals Disaster cash benefit, education scholarships, & legal consultations offered 2008 Premium reduced because fixed cash no longer paid to hospitals Health insurance provided fixed cash benefits for a list of health treatments (not restricted to SAJIDA hospitals): more client-focused health insurance covering secondary healthcare

7 Product Refinement Using PACE PRODUCT Coverage, service quality, exclusions and waiting periods Sum assured in relation to costs Eligibility criteria Value-added services EXPERIENCE Claims procedures Claims processing time Policy administration & tangibility Customer care ACCESS Choice and enrolment Information & understanding Premium payment method Proximity COST Premium to benefit Premium to client income Other fees & costs Cost structure and controls PLG visit to SAJIDA, April 2013

8 Product Refinement Using PACE P - Product Nirapotta Inadequate coverage for fire 2. Inadequate compensation for most common health conditions, high out-of-pocket expenses Product 3. Difficulty in paying for common operations e.g. normal delivery, cataract operation 1. No trimmed version of the product for ultra-poor 2. No voluntary option for current clients to buy more health coverage 3. Inadequate services of community health program

9 Product Refinement using PACE P - Product 1. Fire coverage was increased 2. Community health program introduced to address primary healthcare needs and referrals at clients doorstep through health workers called SAJIDA Bondhu(s) Seen as tangible benefit by clients who don t claim 3. Higher health cash benefits now provided for common health conditions High claims for common procedures like C-section, Appendectomy etc Increased cash benefits based on cost of these procedures at mid-range medical providers in the market More emergency loans disbursed to finance out-of-pocket expenses 4. Normal delivery and cataract operation free for members at SAJIDA hospitals Community health data showed that home births prevalent and risky; Normal delivery made free to encourage hospital delivery Data showed high cataract cases; SAJIDA Bondhu(s) feedback was that many could not afford the operation, which is why cataract made free ANC included in coverage to encourage ANC check-ups for safe pregnancy and delivery

10 Product Refinement using PACE P - Product 4. A revised Nirapotta product was designed to address needs of the ultra poor market, which included life insurance, health insurance (C-section and NVD providing maternity cover) and cattle insurance 5. New products developed with increased health coverage Group insurance for Microenterprise (ME) borrowers employees Benefits include life, health, accident & disability coverage 50% of premium will be paid by ME borrower and 50% by employee Insurance for savers FREE packaged insurance for savers if minimum total savings balance $87.51 Benefits include hospitalization cover and education support to children Health Insurance A voluntary health insurance to be offered at SAJIDA hospitals Benefits will cover health costs with small copayment

11 Product Refinement Using PACE A - Access Nirapotta Single lump-sum premium payment; no categorization Access 1. Low field staff and client understanding of the product due to limited communication

12 Product Refinement Using PACE A - Access 1. Keeping single lump-sum payment for standard cover keep operational costs low 2. Effective methods implemented to increase consumer literacy about product benefits Miroinsurance program established as a separate entity at the head office level Member workshops conducted to educate about Nirapotta Staff training included training on microinsurance program Pocket calendars distributed to field staff Visual brochures and posters designed for members who are mostly illiterate Nirapotta card introduced for members Call center introduced As a result, number of claims increased

13 A - Access Increase Consumer Literacy Nirapotta brochure

14 Das Bild kann nicht angezeigt werden. Dieser Computer verfügt möglicherweise über zu wenig Arbeitsspeicher, um das Bild zu öffnen, oder das Bild ist beschädigt. Starten Sie den Computer neu, und öffnen Sie dann erneut die Datei. Wenn weiterhin das rote x angezeigt wird, müssen Sie das Bild möglicherweise löschen und dann erneut einfügen. A - Access Increase Consumer Literacy Nirapotta policyholder s card

15 Product Refinement Using PACE C - Cost Nirapotta Premium low; financially unsustainable 2. Pricing structure same for short and long-term loans and for all loan sizes Cost 3. Premium perceived as high if all value-added services (VAS) is included 4. Premium for additional children was unfairly high

16 Product Refinement Using PACE C - Cost 1. Premium increased based on actuarial review for financial sustainability 2. Product re-priced by loan type and loan term to make it sustainable & affordable Flat premium changed to sliding scale premiums of Tk. 250 ($3.13) to Tk. 1,050 ($13.13) for following loan types (6-24 months) Microcredit ($100 - $612.5 loan) Microenterprise ($625 - $12,500 loan) Ultra-poor ($75 - $150 loan) Seasonal agriculture ($ $625 loan) 3. Cost of some Value Added Services, Community Health and Legal, subsidized by Microfinance program to keep low-cost affordable premiums Community Health subsidy $141,006 in Legal subsidy $11,781 in Premium for additional children re-priced fairly by loan type and loan term 5. Premium now charged to ultra poor with some benefits subsidized (Veterinary services)

17 Product Refinement Using PACE E - Experience Nirapotta Claims centralised to head office; no software for processing claims; SAJIDA Bondhus not used in the process 2. Many documents required for claim processing Experience 3. Average health claim processing time was 25 days 4. No call centre, any queries handled by field staff 5. No policy document provided to client

18 Product Refinement Using PACE E - Experience Efficient health claims settlement process implemented after process mapping exercise with external consultant 1. Health claims settlement decentralized to more than 100 branches. Branch staff trained on settling frequent claims (C-section, hospitalization) Health claims settlement tool designed to guide branch staff in settling claims Less frequent / complicated claims referred to doctors SAJIDA Bondhu visits claimant or has prior information of the incident 2. Health claim documents reduced to passbook, medical reports and application form 3. Health claims now settled within 7 days Referred claim documents digitally scanned to doctor Doctor responds by to branch staff usually within 24 hrs. 4. Call center handles queries about claims; Claims dispute committee introduced 5. Nirapotta card acts as policy document; actual contract stored at branch offices

19 E - Experience Health claims settlement duration 0-7 days 8-15 days 16-30days Over 1 month

20 Lessons Learnt Low operational costs if integrated with other programs hence keeping premiums low Packaged product allows providing expanded benefits and minimizing the effects of various life event shocks simultaneously Lack of reliable service providers (specially in healthcare) deters consumers from purchasing insurance; microinsurance provider has to shoulder this responsibility of also being service provider Appropriate insurance education methods (visual brochures for illiterate consumers) is very effective Lot of scope for market analysis and new product development in microinsurance

21 Thank You

22 Annex

23 Pricing Nirapotta Components Pricing Life insurance Tk 112 ($1.40) Health insurance Tk 140 ($1.75) Education benefits Tk 27 ($0.34) Disaster Tk 12 ($0.15) Other expenses (overheads, reserve etc) Tk 124 ($1.55) Adjustment for additional premiums Tk -65 ($-0.81) Net Premium Tk 350 ($4.38) Legal (subsidized by MF) Tk 9 ($0.11) Community Health (subsidized by MF) Tk 90 ($1.13)

24 Nirapotta Financial Snapshot Fiscal year Paid Premium $ 421,726 $ 657,600 Paid Claims Health $211,671 $163,214 Death $127,206 $141,897 Disaster $8,975 $12,925 Education $28,591 $37,519 Cattle $0 $2,087 Paid Claims Total $376,443 $357,641 Operational Expenses $96,586 $127,290 Net Income ($51,303) $172,669

25 Health Insurance Description of health service Amount (US $) Community Health Services General Surgery (max) 50 Obstetrical and Gynecological Surgery (max) 50 Ophthalmic Surgery (max) Fracture (max) Accident 10 ENT (max) Other Surgery 50 Hospitalization (max) ANC Support (2 times per year) (each time) 6.25 Asthma Adult (2 times in a year) (each time) 9.37 Normal Delivery at SAJIDA hospitals for members FREE / (Other Hospitals) 25 Cataract Operation at SAJIDA hospitals for members FREE / (Other Hospitals) Medical consultation with General Physicians at SAJIDA hospitals for members FREE FREE

26 Product Refinement using PACE P - Product 4. A revised Nirapotta product was designed by SAJIDA Foundation to address the needs of the ultra-poor market Life and Loan insurance Premium Tk. 40 ($0.50) plus 0.50% of loan disbursed amount, mandatory for borrowers Benefits Upon death of member or member s spouse outstanding loan amount is waived and Tk. 5,000 ($62.50) fixed cash benefit is provided Health insurance Premium Included in above life insurance premium Benefits Fixed cash benefit for Normal Delivery and C-section as per Health Table. Cattle insurance Premium Tk 100 ($1.25) plus 0.70% of loan disbursed amount (in addition to the Life and Loan insurance premium). Benefits the lower amount between 85% of loan and purchase price is refunded or waived upon cattle death, and free veterinary services are provided.

27 E - Experience Health claims settlement process Claim occurs Member submits docs to FO FO discusses with claims committee for authentication FO transfers docs to BM BM refers to Doctor. BM asks SB to visit BM processes using claims settlement tool SB visits claimant Doctor reviews claim BM approves / rejects claim Claims settlement committee finalizes claim decision Accountant informs client Member collects claim if approved

28 E - Experience Snapshot of claims settlement tool