Expanding Distribution

Transcription

1 Expanding Distribution 9 November 2011 Brandon Mathews Emerging Consumer

2 Agenda 08:30 Introduction 08:40 Session Market Research 08:50 Innovative customer focus & distribution: Banco Palmas 09:10 Topic 1 09:30 Topic 2 09:50 Topic 3 10:10 Concluding discussion 10:25 Finish 2

3 Expanding Distribution Successful distribution in microinsurance is done by practitioners that: Learn what their customers want Do their pragmatic best to deliver it Borrow methods which work or innovate to create new ways Take risk 3

4 Establishing & maintaining trust Tips for practitioners Clients don t need to trust that you re a nice person they need to know that you ll pay claims. Practical examples Once service standards were established, Garantech lowered rates on several high frequency products. Partner with a channel that t is trusted t by Even Mobilephone requires a clients and know why they re trusted substantial physical presence to distribute. Exhibit your trust by reducing/eliminating underwriting criteria Make the product appear as if it is for rich people & explain it clearly i.e. be commercial, not condescending. Eliminating 5 underwriting questions increased rate by ~10% and sales more than doubled. BSP Affinity s literature shows aspirational situations coupled with commercial and clear explanations 4

5 Product Features that work Tips for practitioners Installment payments (that s why credit works). Practical examples Z Bolivia developed more advanced processes to handle highly irregular cashflows, eliminating fixed dates Future contingent t money is difficult to Sinafe s funeral insurance, Mapfre s imagine or comprehend. Deliver directly food benefit, Itau s Extended warranty, or explain what s needed. Z s hospital cash Some choice good. Infinite choice is baffling. Multiple examples of pre-underwritten products. 5

6 Examples from Zurich programs. Bolivia: Insurance Pouch Sold through: Newsstands Covers: accidental injury Benefit: 12 month food basket Indonesia: Home Structure Sold through: Holcim Construction Covers: Earthquake, flood, fire. Benefit: loan and rebuild support Mexico: Insurance Card Sold through: h Retailers Covers: accidental injury Benefit: various & assistance China: Deposit Life Sold through: h NCL Agents Covers: Term life Benefit: multiple of savings Brazil: Prix Fix Menu Sold through: TBD Covers: various Life & GI Benefit: various South Africa: Legal Assist. Sold through: Retailers Covers: Legal advice/costs Benefit: On-call advice/reimbursement Not all have worked but all have provided retained learning. 6

7 Mobile Phone & New Technology to support distribution Tips for practitioners Selling directly via mobile phone will work. Fail to learn now or else just fail later. Practical examples MicroEnsure Ghana Mobile phone can presently be an Kudu South thafrica Project; Vayon Brazil enabler of sales force. transaction support tools. Data is a game changer Cignifi results from pilot with Oi and Banco do Brasil show significant discriminator of default risk; significant indicator of customer response. 7

8 MicroEnsure Mobile Insurance Mi-Life Insurance: distributed by MTN Ghana Life insurance sold via Mobile Money Policy bought, managed, claimed on phone Distributed by dedicated agents in MTN stores Undercuts other life insurance prices by 50-90% Mi-Life Insurance Dial Number or Select Option 1. Manage my Insurance 2. Claims 3. Customer Support 4. Authorised Agent GHC 1 = USD

9 MicroEnsure Mobile Insurance Tigo Family Care Insurance: distributed by Tigo Ghana Life insurance sold to Tigo subscribers Free to subscribers, cover based on airtime Distributed by dedicated agents in Tigo stores SMS sent to customer once per month GHC 1 = USD 0.70 Thank you for using Tigo! Based on your Tigo usage in December, your free life insurance is XXX cedis for January. Use more Tigo, get more insurance! 9

10 MicroEnsure Mobile Insurance Product & Proce ess Fea atures Products drive core goals of distribution partner, not insurer Policy covers 2 lives Platform taps into basic customer behaviour issues, not only demand for insurance Client education essential in spite of potential for scale Challe enges Technology a blessing or a curse? Complexity of partnerships and economics Diminishing returns on a free product? Low loss ratios on embedded product Fraud likely to grow but will scale mitigate impact? 2011 Re esults Products growing by more than 4,500 new lives insured per day Will double the number of Ghanaians insured in 2011 More than 90% of clients are new to insurance 2011 FT/IFC Award 10

11 Mobile Application 11 ce Company Ltd

12 Introduction Presentation 12

13 Introduction Presentation 13

14 Introduction Presentation 14

15 Introduction Presentation 15 ce Company Ltd

16 Application Process SMS: Policy Documents: Client receives an SMS on his cell phone confirming the appl being processed under the referral no. Within 30 days customer receives: - Full Policy Terms and Conditions; - Policy Schedule; - Printout of confirmation statement 16

17 Capitalization & other add-ons Tips for practitioners Link the add-on to the underlying product. Link the add-on to the underlying risk. Practical examples Extended Warranty sold bundled with a surge protector electrical strip. Adjuvanz support product for personal complications from critical illness. Allow the add-on to be the product. Q. Which costs more, the can or the soda inside it? A. Does it matter? 17

18 Sales people & point of sale Tips for practitioners Sales people are also new to insurance train measure incentivize and train. Practical examples Best Buy sells without sales person commission through laser focus on training & measurement. Wherever possible, simultaneously l test t Promovendadores d vs poster+price competing alternative solutions. Some people don t sell. Doctors (in my experience) will not promote insurance products and neither will stock-clerks at discount retailers but each will reliably present information that they are comfortable providing. 18

19 Client value and business value Business value looks at the highly visible portfolio profit Client value is incorrectly considered in terms of theoretical individual experience. Revenue Premiums paid - Expenses - Risks transferred + Investment income + Economic activity increased = Profit or Loss = Community welfare increase / decrease Best in class will measure P&L and Community welfare separately and honestly. 19