…sustainable trust
(Rated B+ by AM Best)
AIO Life
Presents
Penetrating The Micro Insurance
Market
Venue:
CRRAE UMOA,
Abidjan- Cote d’Ivoire
Date:
November 13, 2013
(Rated B+ by AM Best)
PENETRATING THE MICRO INSURANCE
MARKET
By
Olugbenga Falekulo
Executive Director (Life)
Continental Reinsurance Plc.
(Rated B+ by AM Best)
Course Outline
Introduction to Micro insurance
The 1st Thing 1st in Achieving a Positive Penetration in Micro insurance
Market Segmentation Pyramid
Penetration Level Across Africa
Possible Engine Growth Drivers for Micro Insurance
Essential Features of MI Products Using the Acronym – UASAVE (You are
Save)
• Some Global Facts About Micro Insurance
• Questions and Answers
• Conclusion
•
•
•
•
•
•
(Rated B+ by AM Best)
Introduction to Micro Insurance
• Micro Insurance may simply be described as the various insurance policies
primarily designed to protect people living below the poverty line against the
risks of disability and death as well as their important assets which are being
used for income generation for them and their family.
• Some elements of savings may equally be incorporated in addition to the
risks disability and death as maturity benefits for micro life policies
(Rated B+ by AM Best)
The 1st Thing 1st in Achieving Positive
Penetration in Micro Insurance?
• The 1st thing 1st in micro insurance is the Proper Market Segmentation by:
• Classifying and re-classifying the markets to be targeted using certain defined
criteria in order to achieve a positive result.
• Some of the criteria that may be used are as follows:
– Level of Income
– Economic Sectors
– Proximity in terms of accessibility to these people etc
(Rated B+ by AM Best)
Market Segmentation Pyramid
An example is illustrated in the pyramid below:
High Income
Earners
Medium Income
earners
Low Income Earners
(Rated B+ by AM Best)
Market Segmentation Pyramid
FARMERS
ARTISANTS
MARKET WOMEN
(Rated B+ by AM Best)
Market Segmentation Pyramid
Agriculture
Credit Life
Pure Life
Property
Health and medical
(Rated B+ by AM Best)
Penetration Level Across Africa
0.06
1.86
0
0.01
0.0002
0.25
0.16
0.76
5.98
0.002
0
0
0.5
1.31
0.32
0
0
0
0.68
0.02
0
0.42
0.38
2.27
7
2.6
1.68
0
0
4.57
0.78
3.19
3.07
0.12
1.1
0.32
7.31
Seychelles 0
2.64
0.23
0
0.94
10.98
55.85
0.08
1.18
1.68
12.03
54.47
(Rated B+ by AM Best)
0
Mauritius 6.1
Why Low Penetration?
• In-effective distribution strategies – Distribution strategies have not been
effective
• Consumers’ unawareness level – The awareness level on the part of the
consumers is very low
• Weak partnership – Robust partnership should be sought with banks and
mobile companies
• Weak regulations – Economic realities of the day
• Dominance of conventional insurance – Over concentration on the
conventional insurance
(Rated B+ by AM Best)
Possible Engine Growth Drivers for
Micro Insurance
•
•
•
•
•
•
•
•
•
Effective awareness programmes
Simplicity of MI products
MI products expansion to cover other needs
Creating trust in the minds of MI policyholders
Effective and efficient alternative distribution channels
Highly robust technology
Commercial sector
Good competition
Highly robust regulations
(Rated B+ by AM Best)
Essential Features of MI Products Using the Acronym –
UASAVE (You are Save)
•
•
•
•
•
•
Understandable
Affordable
Simple
Accessible
Valuable
Efficacy
(Rated B+ by AM Best)
Some Global Facts About Micro
Insurance
• It is a useful tool in economic development
• A proven record of viability in some of the countries well practiced
• MI products are available to meet the needs of all of the low-income
people across all the sectors of the economy
• Growth rate of 10% – 20% p.a. Versus Global conventional
insurance growth rate of 5% p.a
(Rated B+ by AM Best)
Questions and Answers?
(Rated B+ by AM Best)
Conclusion
Thank you
(Rated B+ by AM Best)