Health Insurance Product Design
for
Low Income Women Centred
Groups
Arman Oza
4th Capacity Building Seminar in Health Care Insurance
Feb. 16, 2017
Mumbai, India
1
Objectives of Product Development
Client Value
& Utilization
Scale and
Sustainability
2
What Is Client Value?
Customers don’t
buy products –
they buy solutions
Client Value in
Microinsurance
• Reduced
Vulnerability
• Welfare
3
Intrinsic Value
Perceived Value
Benefits
Features
Cost
Flexible
Will he
pay my
claim?
Communication
-Marketing
-Education
4
Why People Don’t Buy Insurance?
Loss Aversion
• Pain of losing is twice the pleasure of gaining.
• Risk averse on gains and risk takers on losses
Status Quo Bias
• When in doubt, stay where you are.
• Wandering around the reference point.
Availability Bias
• Ignorance of low probabilities
• Visualization of loss-producing events.
Narrow Framing
• Absence of a futuristic outlook.
• Avoiding the big picture
Cognitive Dissonance
• Buyer’s remorse
• Costlier the product, higher is the remorse.
5
Who is a Low Income Consumer
Modest
Earnings
Adverse
health
behaviour
No Savings
Short –term
Outlook
Financially
Excluded
Fatalist
Thinking
6
Salability
Frequent enough
to be credible
Frequency
High enough
to be threatening
RISK
Rare enough
to keep loadings
within limits
Severity
Low enough to
be absorbed by
small contributions by many
Insurability
The PACE Framework
•Coverage
•Flexibility
•Simplicity
•Value Added
Services
•Affordable
•Structure
•Benefit
•Choice
•Information
•Proximity
Product
Access
Cost
Experience
•Quality
•Processes
•Facilitation
Courtesy: PACE Framework, Microinsurance Innovation Facility
8
Profiling Health Risks
Health Risks
Primary Healthcare
(Visits to Family Physician
for common ailments like
cough, cold, fever, etc.
Frequency
Severity
Medium / High Low
Financial
Impact
Low /
Medium
Secondary Healthcare
Low
Hospitalisation for typhoid,
dehydration, etc.
Medium to
High
High
Tertiary Healthcare
Low
Major ailments and
surgeries like cancer, heart
attacks, kidney transplant,
etc.
High
High
9
Why Women Centric?
• Research has proved that
o Women are more sensitive to the well-being of the
family
o They have a better futuristic vision
o More open to new ideas
o More likely to adopt financial planning
o Can take the entire family long.
10
Health Insurance Product Design for Low Income Segment
Features
• Cover frequent risks
• Simple wordings
• Minimum exclusions
Value Added
Services
• Discounted services
• Preventive health
interventions
Pricing
• Uniform Pricing
• Flexible premium
payment
• Incentives for
preventive health
actions
THANKS
12