Breakthrough innovations in Microinsurance
6th African Insurance Distribution and Bancassurance Conference
12 October 2016
EXPERTS IN CREATING
INCLUSIVE DIGITAL
1
INSURANCE MARKETS
AGENDA
1. Introduction
2. Innovations in insurance for the emerging consumer
3. Conclusion
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INTRODUCTION
3
Backed by
TO GET YOUR ATTENTION
China insurance = Kenya mobile money
• Zhong An: China’s first online-only insurer, launched in 2013, is getting huge numbers
by leveraging big data to price individual policies for online retailers
– 400m customers with 4bn+ policies
 380m policies written in one day for 11 Nov 2015 shopping festival in China
– Valued at US$8bn valuation based on the Series A financing
INNOVATIONS IN
INSURANCE FOR THE
EMERGING CONSUMER
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INNOVATING ACROSS THE SPECTRUM
CUSTOMER ENGAGEMENT: FINANCIAL EDUCATION
CAN BE A DRIVER OF VALUE BEYOND JUST CSI
Increasingly we are seeing financial education demonstrating real monetary value… and yet independent
impact assessments ensure quality financial education outcomes
Key objectives of the team in 2008
By 2016, improving NTU
rates by 6-11% demonstrates
significant savings
6%
11%
Improving longer term
lapse rates ensure
better value for clients
and insurers
Source: Hollard
PRODUCT: PARAMETRIC (INDEX) INSURANCE IS PIVOTING
TOWARDS PORTFOLIO COVER AND BUNDLED PRODUCTS
Farmers can then
access other
insurance products
through the same
agents and mobile
platform
Farmers can ask
questions to local
agents; and
change their
savings amount on
USSD
When large
weather event
happens, factory
gets portfolio
payout and share
some of it to
farmers savings
accounts
S o u r c e : I L O ( t e a f a r m e r s i n K e n ya ) , B FA ( r e vi e w o f i n d e x i n s u r a n c e i n K e n ya )
Factory buys
portfolio
cover
Farmers and
pickers sign up
for savings
product
Specified
savings amounts
are deducted
from monthly
tea payments
When small
weather event
happens
farmers can
access their
savings
Farmers receive
monthly payment
confirmations,
check their
balance on USSD;
savings are locked
DISTRIBUTION: MOBILE INSURANCE HAS THE POTENTIAL TO
REACH TREMENDOUS SCALE
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EcoLife Zimbabwe reached 20% of the adult
population in 7 months
Loyalty
(life)
MTN Nigeria reportedly reached 1 million customers in a year
Paid
(life)
Tigo Bima Ghana reached almost 1 million lives in 3 years
Freemium
(life)
Tigo Bima Ghana supported 1.1 million people within first 2 years
Paid
(HC )
Telenor Pakistan enrolled 1 million customers in first 6 months
Loyalty
(life)
Airtel Nigeria had 200,000 customers in the first 3 weeks
Loyalty
(life + HC)
Telenor India had more than 10 million subscribers opt-in in 10 weeks
Loyalty
(life)
Many of these models have realized “the value of zero” from
behavioural economics as they launch ‘free to the consumer
DISTRIBUTION: ….WHICH HAS LED TO MOBILE OPERATORS
MOVING UP THE INSURANCE VALUE CHAIN
Early Stage
Everything / Everywhere
More Mature
Strategic partnerships
& investments
Advanced
Mobile operators as insurers
aYo Holdings
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INCENTIVES: A TONIC FOR HEALTH AND
WELLNESS
Telenor, an MNO, investing in health and wellness
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VALUE CHAIN INNOVATIONS: MALCOLM, OUR MOBILE
CLAIMS ASSESSMENT PLATFORM, SUPPORTS THE CREATION
OF A HOUSING INSURANCE MARKET IN EMERGING MARKETS
Lowering claims assessment costs
Simplifying claims procedures
Improving client administration
Removing barriers to entry
Increasing insurance market size
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ABC
BEHAVIOURAL ECONOMICS: AND DON’T FORGET
THE LESSONS FROM BEHAVIOURAL ECONOMICS
See also “The psy chology of microinsuranc e: Small changes can make a surprising differ enc e”, Micro -insur anc e Compendiu m
Vol 2 2012
CONCLUSIONS
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CONCLUDING THOUGHTS
• Innovations are coming from across the spectrum from product, incentives, financial
education, distribution and the value chain and yet this is just the start as InsurTech
starts to play itself out in emerging markets
• 5 predictions for InsureTech in the next year (mainly developed countries)
–
–
–
–
Explosion of technology ecosystem with very few exits (although maybe a few)
2nd wave of corporate venture capital into InsureTech eg RGA Ventures
Winners begin to expand cross-border (a number of emerging consumer players are now global)
Risk-bearing innovations will move beyond P2P (P2P has still to take off in emerging markets but watch
this space)
– Parametric insurance will gain some momentum (after significant challenges, new approaches are coming
on line)
• But who wants an insurance app?
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Source: 5 predictions from Caribou Honig , QED Inv estor s
JEREMY LEACH
CEO
[email protected]
EXPERTS IN CREATING
www.inclusivitysolutions.com
INCLUSIVE DIGITAL
INSURANCE MARKETS