“3-D”ClientValueAssessmentAssessingClientValueforAgriculturalIndexInsurance

ATechnicalGuide

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Authors:

EAConsultants:

CoralieMartin

BarbaraMagnoni

ILOImpactInsuranceFacility:

AparnaDalal

FeedtheFutureInnovationLabforAssetsandMarketAccess(AMAInnovationLab)

TaraChiu

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TableofContents

AboutthisGuide..........................................................................................................................................5

The“3-D”AnalysisofClientValue...............................................................................................................6

ThecaseformeasuringClientValue........................................................................................................6

The3-DTool.............................................................................................................................................6

HowtousethisGuide..................................................................................................................................7

The3DimensionsofClientValue.............................................................................................................8

Figure1.3-DTool“AssessmentInput”Sheet(Indicator#2)................................................................9

Figure2.The3-DToolAssessmentResultSheet.................................................................................9

The5phasesofa3-DAnalysisofClientValue.........................................................................................9

Figure3.The5Phasesofa3-DAnalysisofClientValue....................................................................10

Step1:ProjectPlanning.............................................................................................................................11

Objectives...............................................................................................................................................11

Planningfora3-DAnalysis.....................................................................................................................11

Understandproductandcontext.......................................................................................................11

Setexpectations.................................................................................................................................11

Refinescopeandobjectives...............................................................................................................11

CreateWorkplan................................................................................................................................12

Figure4.The3-DClientValueAssessmentWorkplan–SampleTasks..............................................12

Figure5.The3-DClientValueAssessmentWorkplan–SampleTimelines........................................12

Step2:Preparation....................................................................................................................................13

Objectives...............................................................................................................................................13

Preparingfora3-DAnalysis...................................................................................................................13

Discussadministrativedataneedsandavailability............................................................................13

Sendwrittenrequeststorelevantstakeholders................................................................................13

Researchinformationtobeobtainedfromexternalsources............................................................13

Sampling.............................................................................................................................................13

Preparationofinstruments................................................................................................................14

Preparationoftrainingmaterials.......................................................................................................14

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Planningoffieldtrip...........................................................................................................................14

Step3:DataCollection...............................................................................................................................15

Objectives...............................................................................................................................................15

Obtainingdatafora3-DAnalysis...........................................................................................................15

Gatheringadministrativedata...........................................................................................................15

Conductfieldtripasplanned.............................................................................................................15

Obtainandverifydatasets.................................................................................................................15

Step4:DataAnalysis..................................................................................................................................16

Objectives...............................................................................................................................................16

AnalyzingDatafora3-DAnalysis...........................................................................................................16

CleanDatasets....................................................................................................................................16

RunMQSTest.....................................................................................................................................16

Obtainascoring.................................................................................................................................16

Step5:FormulatingRecommendations.....................................................................................................17

Objectives...............................................................................................................................................17

FormulatingRecommendationstoincreaseclientvalue.......................................................................17

Formulatehypothesis.........................................................................................................................17

Shareresultsandcollectfeedback.....................................................................................................17

Finalrecommendations......................................................................................................................17

Finalreport.........................................................................................................................................17

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AboutthisGuide

The3-DClientValueAssessment TechnicalGuide (3-DTechnicalGuide)provides guidanceonhow toconducta3-DAnalysisofClientValueforagriculturalindexinsuranceproducts,usingthe“3-DClientValueAssessmentTool”(3-DTool).

Itispartofabroadersetoftools,templatesanddocumentsthataimtosupport3-DAnalysesofClientValue.Thesedocumentswillbereferredtothroughoutthisguide,withindicationsonwhenandhowtousethem.

Thetablebelowsummarizesthedifferentdocumentsthatconstitutetheentiretoolkitfora3-DAnalysisofClientValueforagricultureindexinsuranceproducts.

DocumentName Description

3-DTechnicalGuideThe3-DTechnicalGuide(presentdocument)providesguidanceonhowtoconducta3-DAnalysisofClientValue,usingthe3-DToolandassociateddocumentsdescribebelow.

3-DToolThe3-DToolisthecenterpieceoftheanalysis.Itlooksatclientvalueacross14indicatorsandprovidesindicationsonhowobtainascoringforeachofthem.

3-DClientValueAssessmentWorkplan

Thisdocumentaimstosupporttheplanningofa3-DAnalysisofClientValue.Itincludestypicaltasksandsteps,presentedintheformofasampleworkplan.

3-DAdministrativeDataChecklist

The3-DAdministrativeDataChecklistsummarizesimportantinformation,administrativedataanddocumentationstocollectthroughouttheanalysis.Italsohelpskeeptrackofdeadlinesandinformationgaps.

3-DInterviewGuidesThisfilecontainsinterviewguidesforcoveredfarmers,management,andsalesstafforagents.Eachquestionisassociatedtotheindicatoritaimstoassess.Theguidescanbecustomizedtoproductsandcontexts.

MQSCalculationSheet

TheMQSCalculationSheetisatoolthatprovidesameasureofindexreliabilityusedforIndicator#1.Itisasimplifiedversionofthe“MinimumQualityStandard”methodology.

3-DWorkingTemplate The3-DWorkingTemplateprovidesstep-by-stepguidanceforanalyzingthedatacollectedthroughtheanalysisforeachindicator.

3-DReportTemplate The3-DReportTemplatehasbeencreatedtosupportthepresentationoffindingsandrecommendationsaftertheanalysishasbeenconducted.

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The“3-D”AnalysisofClientValue

ThecaseformeasuringClientValue

Smallholder farmersarehighlyvulnerable torisks, includingweatheruncertainty,pests,disease,pricevolatility,andlaborrisk.Often,existingtoolsthatsmallholderfarmersusetomanagethoserisksarecostlyandinsufficient.Inthiscontext,insuranceproductscoveringagriculturalriskshavethepotentialtoofferhighclientvalue.

While traditional insurance products are often inaccessible to smallholder farmers, index insuranceproductsmight offer an affordable and feasible alternative. But poorly designed index insurance cancreatemorerisksthantheymitigate.Forexample,apoorlydesignedindexcouldresultinfarmers’failingtoreceivepayoutswhentheyexperiencelosses,orreceivingpayoutswhentheydidnotsufferany.Otherissues,suchaslackofunderstandingoftheproductamongfarmers,highpremiumsorirrelevantcoverage,couldalsoerodeclientvalue.

Particularlywithcomplex,indexinsuranceproducts,understandingtheproducts’valuepropositionandassessingthevaluetheybringtoclientsisessential.The3-Dtoolprovidesaframeworktoconductsuchanalysis. One of the key underlying assumptions of this tool is the following: if a product cannot bedesigned,distributed,anddeliveredtoclientsinawaythat–ataminimum–doesnotmakeclientsworseoffforhavingpurchasedtheproduct,itshouldnotbesold.

The3-DTool

The3-DToolisaClientValueAssessmenttoolcreatedbytheILO’sImpactInsuranceFacilityandtheFeedtheFutureInnovationLabforAssetsandMarketAccess(AMAInnovationLab).

MergingtheFacility’sPACEAnalysis,adaptedforindex-basedagriculturalinsurance,withtheAMAInnovationLab’scalculationsforMinimumQualityStandardsforIndexInsurance,thistoolprovidesamulti-dimensionalunderstandingofthevaluepropositionforpotentialorexistingclients.

ThethreedimensionsincludedintheanalysisareDesign,DistributionandDelivery.Eachdimensionincorporatesdifferentelementsthatcontributetoclientvalue.

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HowtousethisGuide

WhoThis Guide has been created to support anyoneconductinga3-DAnalysisofClientValuefor index-basedagricultural insuranceproductsusingthe3-DTool.The3-DToolcannotablybeusefultoinsurers,consultants,technicalassistancepartners,donors,orresearchers.

WhyAlthough the 3-D Tool information on the type ofdata needed, data collectionmethods and scoring,experiencehasshownthatasuccessful3-DAnalysisof Client Value requires careful planning,communication and follow-up. This documentprovidesstep-by-stepguidanceforeachphaseoftheanalysis.

What ThisGuideisasupportingresourcethatismeanttobe used in conjunction with other relevantsupporting documents and templates (See SectionAboutthisGuide).

WhenThis Guide has been designed to support a clientvalue analysis conducted for an existing product,afteritslaunch.

Iftheanalysisisconductedbeforeproductlaunch,refertothe3-DExAntetool,whichhasbeendesignedforsuchanalysis.

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Astep-by-stepguidetoa3-DAnalysisofClientValue

The3DimensionsofClientValue

The3-DToolassessesclientvalueacrossthreedimensions:1. Design2. Distribution3. Delivery

Foreachdimension,the3-DTooldefinesstandardsthateveryproductreachingthemarketisexpectedtomeet.Thesestandardsaredefinedby14distinctindicatorsofclientvalue:

Toevaluatehowaproductperformsagainstthe14indicatorsofclientvalue,the3-DToolprovidesspecificdatasourcesandthresholds.A3-DAnalysisofClientValueinvolvesobtainingtherelevantinformationfrommultiplesources,conductingbothqualitativeandquantitativedataanalysis,andobtainingascoringforeachindicator.Thefigurebelowprovidesanexampleofhowthetoollookslikeforaspecificindicator(here,Indicator#2).Thetoolusesthesameformatforeveryindicator.

Dimension Indicator

1. Index reliably predicts farmers’ experience

2. Covers appropriate activities

3. Covers appropriate risks

4. Enables productive investment decision-making

5. Minimizes gaps in coverage

6. Covered farmers are adequately informed of product details

7. Staff and sales agents are adequately trained, incentivized, and supervised to inform clients and sell responsibly

8. Payment processes minimize liquidity constraints

9. Product is inclusive

10. Product delivers adequate coverage for money

11. Benefits are delivered in a timely manner

12. Procedure to deliver benefits is reliable and understood

13. Provider is responsive and proactive about questions, problems, and complaints

14. Covered farmers receive evidence of coverage

Design

Distribution

Delivery

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Figure1.3-DTool“AssessmentInput”Sheet(Indicator#2)

Scores range from0 to2. In the tool, thescorescanbeselecteddirectly fromthedropdown list.Theresultsareautomaticallycomputedandreflectedinthe“AssessmentResult”sheetofthetool,givingafinal score and thedistributionof scoresby indicator, as shown in Figure2below. The results of theanalysiscanbeusedtoformulaterecommendationsandinformproductimprovements.

Figure2.The3-DToolAssessmentResultSheet

The5phasesofa3-DAnalysisofClientValue

Althoughthisstructuremightbeadjustedtodifferentprojects,a3-DAnalysistypicallyfollowsthestepsoutlinedbelow(SeeFigure1).Thisdocumentprovidesguidanceonhowtoconducta3-DAnalysis foreachofthesesteps.

Indicatorassessed

DescriptionofinformationrequiredforeachdatasourceforIndicator#2.

PossiblescoresforIndicator#2andthresholds.Thescoringisbasedonananalysisofthedataobtainedagainstthesethresholds.

DatasourcesneededtoconducttheanalysisforIndicator#2.

Finalscore

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Figure3.The5Phasesofa3-DAnalysisofClientValue

STEP

01ProjectPlanningü Definescopeandobjectivesü Identifykeystakeholdersü Definetimelinesü Createworkplan

STEP

02Preparation

ü Identifydatasourcesü Prepareinstrumentsü Preparetrainingmaterialü Planningoffieldtrip

Datacollection

ü Trainsurveyteamsü Conductinterviewsü Deskresearchü Collectadministrativedata

STEP

03

Dataanalysis

ü Cleandatasetsü Analyzeinterviewresultsü Obtainscoringforeach

indicator

STEP

04

STEP

05 ü Reviewstrengthsandgapshighlighted

ü Obtainfeedbackü Formulaterecommendations

Recommendations

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Step1:ProjectPlanning

Objectives

Good planning is essential for a successful 3-D Analysis. This phase involves obtaining a generalunderstandingoftheproductassessedandthecontextinwhichitisdistributed.Preliminaryresearchanddiscussionsshouldhelpcreateandrefineaworkplanforthe3-Danalysis.

Planningfora3-DAnalysis

Understandproductandcontext:Anyinformationthatcanbeeasilyobtainedonlineorfromtheinsurer(backgroundinformation,productsheets,articles,regionalcontext,etc.)canbecollected

andreviewed.Thisshould include informationonkeystakeholders (e.g., insurer,distributor, technicalassistancepartner…)andtheirrespectiveroles.

Set expectations: Objectives anddeadlinesshouldbediscussedwithkey

stakeholders in theearly stages,alongwithexpectations related to data requests,interviews, and any activity that requirestime commitments. It might be useful toassignonepointofcontactineachrelevantinstitution.

Refine scope and objectives: Earlydiscussions should also help obtain

relevant information to refine the scope ofthe assessment, such as number ofcustomers, areas in which the product isdistributed, constraints and additionalresourcesneeded(e.g.,localsurveyors,etc.).

The3-DTool:shouldbereviewedtohaveaclearunderstandingofthetool,anticipateneedsandrefineprojectscopeandobjectives.

3-DClientValueAssessmentWorkplan(SeeFigure4)canbeadaptedandusedasatemplate.

Refiningthescope:cropselection

When a product is available for multiple crops,decisionsmustbemadeonwhichcrop(s)toincludeintheanalysis.Thiswillhaveanimpactonthesampling,andontheanalysisofproductrelevance.

If only one index is used to determine payouts, theanalysismaybe conducted for all the crops at once.However, if each crop has its separate index, it isrecommendedtofocusononecroponly.

Ingeneral,thefocusshouldbeonthecropthatismostimportanttofarmers’well-beingintheareawheretheanalysis is conducted. Discussions with themanagement or publicly available sources may helpobtainthisinformation.

RESOURCES:

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CreateWorkplan:The3-DClientValueAssessmentWorkplancanbeusedasatemplatetodefinemainstepsandtimelines.Timelinesareindicativeandcanbetailoredtoeachprojectdependingon

scope,objectives,constraintsandresources.Thesuggestedstepsmayalsobeadjusted.Figures4and5belowshowhowthe3-DClientValueAssessmentWorkplanlookslikeinpractice,withtheexampleofthesecondstepoftheanalysis(note:thetableshavebeencondensedtofittheformatofthisdocument).

Figure4.The3-DClientValueAssessmentWorkplan–SampleTasks

Figure5.The3-DClientValueAssessmentWorkplan–SampleTimelines

Ref. Task Responsible Startdate EndDate

Step2.Preparation2.1 Discussadministrativedataneedsandavailabilitywithkeystakeholders XX MM.DD.YY MM.DD.YY2.2 Identifyrelevantsourcesforeachdocumentneededanddefinetimelines XX MM.DD.YY MM.DD.YY2.3 Sendwrittendatarequeststorelevantstakeholders XX MM.DD.YY MM.DD.YY2.4 Researchinformationtobeobtainedfromexternalsources(researchinstitutes,government,etc)XX MM.DD.YY MM.DD.YY2.5 Samplingforfarmers,staffandagentsinterviews XX MM.DD.YY MM.DD.YY2.6 Preparationofsurvey/interviewinstruments XX MM.DD.YY MM.DD.YY2.7 Preparationoftrainingmaterialforsurveyteams(ifrelevant) XX MM.DD.YY MM.DD.YY2.8 Planningoffieldtrip XX MM.DD.YY MM.DD.YY

Ref. Responsible Startdate EndDate 1 2 3 4 5 6 7 8 9 10

Step2.Preparation2.1 XX MM.DD.YY MM.DD.YY2.2 XX MM.DD.YY MM.DD.YY2.3 XX MM.DD.YY MM.DD.YY2.4 XX MM.DD.YY MM.DD.YY2.5 XX MM.DD.YY MM.DD.YY2.6 XX MM.DD.YY MM.DD.YY2.7 XX MM.DD.YY MM.DD.YY2.8 XX MM.DD.YY MM.DD.YY

Weeks

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Step2:Preparation

Objectives

Thesuccessofthe3-DAnalysisliesgreatlyinthecapacitytocollectdataandelicittruthfulanswersfromallstakeholders.Step2aimstoensurethatalltheconditionsaremettoobtaincompleteandaccuratedata. This implies communicating clear requests to the right people, providing relevant training andguidance,andensuringthatinterviewandsurveyinstrumentsareadequate.

Preparingfora3-DAnalysis

Discussadministrativedataneedsandavailability:Administrativedatarequestsshouldbediscussedwith the relevant stakeholders toensure thatdata isavailable, identifywhocanprovide it, and

under which timeframe.When data is not available or incomplete, further discussions can help findalternativeoptions.

Sendwrittenrequeststorelevantstakeholders:Afterreachingacommonunderstandingoncontent,deadline and person responsible, a clear, written request should be sent to all the relevant

stakeholders,mentioningthetypeofinformationexpected,formatsanddeadlines.

Researchinformationtobeobtainedfromexternalsources:Forsomeindicators,the3-DToolreliesdirectlyonexternalsources.Thesesourceswillvarydependingonprojectsandcountries,andmust

be researched and identified. Potential sources include agricultural research institutes (e.g., ILRI,CIMMYT),internationalorganizations(e.g.,WorldBank,FAO),orgovernmentagencies.Externalsourcescanalsobeusedtofillinformationgapsorsupplementdataobtainedfrominterviews.

Sampling:Thesamplingoffarmerstobeinterviewedisacrucialpartofanalysis.Poorsamplingmayresult in important biases in the analysis. Although a 3-D Analysis does not require to have a

representative sample, interviewinga sufficientnumberof farmers fromdifferentgeographicareas isessential.

The3-DAdministrativeDatachecklistliststhedocumentsandinformationtobeobtainedfora3-DAnalysis.Thislistcanbeusedtokeeptrackofinformationobtainedanddeadlines.

The3-DInterviewGuidescanbeusedtoruninterviewsfora3-DAssessment

RESOURCES:

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Preparationofinstruments:The3-DInterviewGuidesshouldbereviewedbeforethedatacollectionprocessandquestionsmaybeadjustedifneeded.Decisionsmayalsobemadeonformat(e.g.,focus

groupsvsinterviews),andsupportingdocumentssuchasproductsheets,documentsexplainingcoverage,customersatisfactionsurveys,mustbepreparedandprinted.

Preparationoftrainingmaterials:Ifthirdpartiesareinvolvedinthedatacollectionprocess,suchassurveyors or translators, ensuring that they are familiar with the instruments and trained to

administerthemisessential.

Planningoffieldtrip:Theplanningoffieldtripshouldbeadaptedtoeachprojectscope,logisticalconstraints,resourcesavailableandsampling.Aprocesscanbediscussedwithpartnerstoensure

that farmers will be available and willing to be interviewed at the time of the visit. At this stage,appointments for interviews should alsobemadewith themanagement and staff / agents.Althoughrigoroussamplingisnotneededforagentsandstaffinterviews,itishighlyrecommendedtointerviewafewagents(2-3)foreachareavisited.

SamplingGuidelinesforfarmersinterviews

InformationNeeded

o Listofareas(villages,districts,etc.–dependingongeographicalscopeandinformationavailable)wheretheproductisdistributed

o Listofareaswherethereareconstraintsforfieldwork

o Listofareaswheretherehasbeenapayoutvs.areawheretherehasnotbeenapayoutinthelast10years

o Percentageoffarmerswhohavereceivedanindemnityinthelast10years

of farmers who have received an indemnity in in total = in sample %

#Totalfarmerscovered #Farmersinsample1-500 1-50

500-1,000 50-1001,000-5,000 100-1505,000-10,000 150-20010,000-50,000 250-300

#Areasintotal #Areasinsample1-10 1-510-20 5-1020-50 10-1550-100 15-20100-500 20-30

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Step3:DataCollection

Objectives

Obtainingreliabledatasetsandrelevantinformationontheproductassessed

Obtainingdatafora3-DAnalysis

Gatheringadministrativedata:Afterthewrittenrequestshavebeensent,makesuretokeeptrackofinformationobtained,sendremindersasneededandproviderelevantclarifications.

Conductfieldtripasplanned:FollowtheplanningcreatedinStep2forconductinginterviewswithfarmers,agentsand/orstaff,andmanagement.

Obtain and verify datasets: Especially if farmers interviews are conducted by third parties, it isadvisable to conduct periodic checks and review any available datasets regularly. Similarly,

administrativedatamustbeverifiedtoensurethattheinformationprovidediscomplete.

The3-DAdministrativeDatachecklistcanbeusedtokeeptrackofinformationobtained

RESOURCES:

TipsforFieldwork

ü Findtherighttime:thoughmakingappointmentsmightnotbepossible,findingthebesttimetovisitfarmersandbeingawareoftheirschedulesisimportant.

ü Findtherightplace:makesurethatthesettingisconducivetosharingexperiencesandopinions.

ü When traveling to remove areas, verify thatmeans of communication are available, in case ofunexpectedevent(e.g.,checkingcellphoneconnection,surroundings)

ü Whentheresearchertrainsateamofsurveyors,makesuretoobserveafewinterviewstoconfirmthattherecommendedapproachisfollowed.

ü Berespectfulandapproachable.

ü Useappropriatelanguage,avoidingjargon.Supportingdocumentsandvisualscanalsobehelpful.

ü Makeitclearthatnorewardcanbeobtainedfromprovidingcertainanswers,positiveornegative

ü Donot assume that farmers donot understand complex insuranceproducts. Explain conceptsclearlyandpayattentiontoanswers.

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Step4:DataAnalysis

Objectives

Analyzingtheinformationgatheredtoobtainascoringforeachindicator.

AnalyzingDatafora3-DAnalysis

CleanDatasets:Informationobtainedthroughinterviewsmaybeincompleteandcontainerrors.Thefirststepoftheanalysisistoidentifytheseerrors,fillthegapswhenpossible,andobtainaclean,

usable dataset. If answers are deleted, the impact on sample representativity, if significant,must beaccountedfor.

RunMQSTest:Indicator1reliesontheMinimumQualityStandardtest,amethodologydesignedtodeterminewhetheranindexproduct,atthepriceatwhichitisbought,makesclientsbetteroffor

worseoff.TheMQSCalculationSheetprovidesthenecessaryindicationstorunthistest.

Obtainascoring:ObtainingascoringforIndicators2to14requiresbringingtogethertheinformationgatheredfrommultiplesourcesandanalyzingitagainstthethresholdssetbythe3-DTool.The3-D

WorkingTemplatecanbeusedasaworkingdocumenttoconductthisanalysis.

Whatdodifferentscoresmean?

TheMQSCalculationSheetisatooldesignedtoruntheMQSTest

The3-DWorkingTemplateprovidesguidanceondataanalysisandscoringforeachindicator.

RESOURCES:

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Step5:FormulatingRecommendations

Objectives

Formulatingmeaningfulrecommendationstoaddressgapsidentifiedandincreaseclientvalue.

FormulatingRecommendationstoincreaseclientvalue

Formulate hypothesis: A 3-D Analysis helps highlight gaps and strengths in product design,distributionordelivery.Ultimately,thisanalysisshouldinformproductimprovementsandincrease

clientvalue. Indicatorswhere theproductobtainspoororaveragescores indicateareaswhereactionshould be taken to ensure that the product brings value to clients. Often, the information obtainedthroughinterviewsoradditionalresearchprovidesrelevantelementstoformulatehypothesisonproductimprovements.

Shareresultsandcollectfeedback:The3-DAnalysisshouldbeconductedinclosecooperationwithinsurersandpartners.Oncethescoringhasbeenobtained,itisusefultodiscussitwiththedifferent

stakeholders involved, and make adjustments if relevant. The hypothesis developed should also bediscussed:insomecases,thesolutionsproposedmayalreadyhavebeentestedinthepast,maynotbefeasibleorrelevant.Additionaldiscussionsshouldhelprefinehypothesisandobtainbuy-in.

Finalrecommendations:Finalrecommendationsshouldaddressthegapsidentifiedintheanalysis,relyoninformationobtainedthroughinterviewsandresearch,andfittheproductandcontext.Once

the 3-D Analysis is finalized, the insurer and partners may need to prioritize the implementation ofrecommendationsbasedonscoresobtained(startingwith“poor”scores)andresourcesavailable.

Finalreport:Havingawrittenrecordoftheanalysisconductedisimportanttokeeptrackofissuesidentifiedandmonitorimprovements.Awrittensummaryorreportmayalsobeusedasmaterialto

communicatetheresultsoftheanalysisandobtainthenecessarysupportandresourcestoimplementtherecommendedchanges.The3-DReportTemplatecanbeusedasaframeworktopresentfindingsandresults.

The3-DReportTemplateprovidesaframeworktopresentfindingsandrecommendations

RESOURCES:

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