MicroEnsure Overview: by the Numbers

Founded in 2002 and largely grant funded; 2007 Bill & Melinda Gates

2012 conversion to for-profit social enterprise

Investors: IFC, Omidyar Network, Sanlam, AXA

Design, implement and operate micro insurance products worldwide

42+ million customers in Africa/Asia

85% of customers are new to insurance

Cover various classes of risk: life, inpatient/outpatient health, crop, political violence, micro asset, accident/disability, slum clearance

50,000 claims paid in past year

90 banking and microfinance partners

70 insurance partners

12 telecom partners

4-Time Winner of Financial Times/IFC Awards

Ghana: where it all began!

MTN paid for insurance

8.8m subs <10k insured

Tigo free insurance

3.4m subs

1m+ embedded

>250k paid

• MTN had much larger client base• Started with paid only• Tigo achieved much higher paid customer base over same period starting with embedded

Concept: working with telcos

• Clients do not wake up wanting to buy insurance but they do wake up worried about the risks they face.

• Telco’s suffer from pressure on ARPU, sim switching and high churn

• We aim to combine these two facts to create a win-win

• Phase 1: introduce “free” insurance– Telco pays premiums for clients that spend a minimum amount of ARPU each month

– The more ARPU you spend the more insurance you earn next month

– Clear KPI’s with product closed rapidly unless indirect revenue gains exceed costs

• Phase 2: freemium upsell– Having paid claims quickly in Phase 1 we normally see 25%+ clients willing to pay a small fee to retain

the free product but add cover for an additional family member

– This gets people paying for insurance whilst also retaining the loyalty benefits

• Phase 3: retail upsell– We introduce a range of products to the market we have created leading to direct revenue for the

telco & drives usage of mobile money platform

Airtel Africa: major deployment of free insurance

8 million new enrolled policy

holders

Product Example – Ghana “3 for Free”

• Phase 1 – January 2014

• Phase 2 – November 2014

• Double Cover – pay GHS 1 per month to double your 3 for Free Cover: enjoy up to GHS 5,000 in life, accident cover and GHS 300 hospital cash

• Family Cover – pay GHS 3 per month to double your 3 for Free Cover and give them same

coverage to a loved one

Monthly Recharge Life Cover Accident Cover Hospital Cash

GHS 5 – 9.99 GHS 250 GHS 250 GHS 25

GHS 10 – 19.99 GHS 500 GHS 500 GHS 50

GHS 20 – 49.99 GHS 1,250 GHS 1,250 GHS 100

GHS 50 and up GHS 2,500 GHS 2,500 GHS 150

Role & Responsibilities across value chain

Partner Value Chain

Airtel

Product marketing (ATL/BTL), monthly subscriber data, insurance

premium payment, Tier 1 customer service

MicroEnsure

Product & Process Design, Training, Customer Field Engagement, USSD/SMS, Tier 2 Customer

Service, Policy Administration, Claims Management, Impact and

Risk Monitoring, KPI Measurement

Insurance Company

Product and Pricing Approval, Underwriting, Local Risk Carrier,

Regulatory Liaison

Did it work? ARPU Impact

• There is a clear impact on ARPU for insured customers

• Impact is high during the month of subscription and reduces gradually over time.0.00

5.00

10.00

15.00

20.00

25.00

Oct Nov Dec Jan Feb Mar Apr May June

Cu

rre

ncy

ARPU Comparison – Insured vs Control

Control All Insured

Insurance Launched

Oct Nov Dec Jan Feb Mar Apr May

4th Quartile ARPU

Control Insured

Oct Nov Dec Jan Feb Mar Apr May

2nd Quartile ARPU

Control Insured

Oct Nov Dec Jan Feb Mar Apr May

3rd Quartile ARPU

Control Insured

• Low ARPU customer behaviour is by far the most impacted by free insurance product• The three months from launch saw a uplift in revenue for the Telco• Again there is consistently higher revenue from those enrolled than those not enrolled in

insurance product• Biggest uplift was seen in low ARPU customers• 23% of those auto enrolled who previously spent under $2 now spend above $2 threshold -

significant affect on ARPU & revenue

Three for Free: effect on recharge

Churn Impact

Country Churn of Insurance SubscribersChurn of OverallCustomer Base

Ghana 0.22% 6.2%

Nigeria 0.04% 5.9%

Burkina Faso 0.29% 6.1%

Niger 1.03% 4.2%

Madagascar 0.07% 5.6%

Churn by Country

Churn is significantly lower for insurance subscribers, even when some customers are automatically enrolled (as in Ghana, Burkina Faso, and Niger).

Looking back

• There was a positive business case for all stakeholders – including the client

• Free insurance did help educate the masses

• We were able to upsell the majority

• However – the model is a really “hard sell” for the telco having to place a big bet before finding out if it worked

• We needed a way to reduce the risk for the telco for future deployments

Telenor Suraksha - India

Case Study

Timeline

• MicroEnsure had worked with Telenor in Asia before (Grameenphone, TP, easyPaisa etc)

• We were contacted in June 2015 to help create a loyalty product

• Data gathered in July and detailed business case created by MicroEnsure for Telenor

• Go-decision made in August by Telenor

• We had eight weeks to build and implement

• Product launched end of October 2015

Telenor’s strategic focus

1. Gain market share: new SIM cards are provided with two months free insurance. They are then offered a “target” top up amount in order to maintain free cover.

2. Drive ARPU: all existing customers are made a “Target offer”, they can opt in but to qualify for insurance they have to increase top up and hence this drives revenue.

3. Rebrand from Uninor to Telenor, the brand that cares.

The business case for this product is therefore immediate and at the individual subscriber basis.

• Product type – Life insurance paying a lump sum in the event of death due to any cause

• Age limits – Minimum 18 years with No maximum age cap

• Enrolment channels – Branded Retail, POS, SMS, USSD, IVR & Call center

• Claim settlement turnaround time – Within 7 days of document completion

• Penetration – Entire market in 68 years : Around 46 Mn (3.9% of

total population)

– Suraksha in 150 days : Over 20 Mn Customers

• Insured clients profile – 100% prepaid subscribers, most of them living in rural areas. Over 95% of all clients never had any form of insurance before

Telenor Suraksha Product Overview

No documentation - No medical exam - No age limit - No exclusions

Recharge Slab

(for Target List

generation)

Insurance Cover

1 – 49 > Rs. 20 Incremental

Recharge

Min. Insurance of Rs. 5000.

Post Rs. 5000, based on Actual

Recharge done.

50 – 99 > Rs. 20 Incremental

Recharge

Actual Recharge Amount *

100

100 – 299 > Rs. 40

Incremental Recharge

Actual Recharge Amount *

100

300 – 499 > Rs. 50

Incremental Recharge

Actual Recharge Amount *

100

Lessons from Suraksha

• Clear strategic objectives with measurable targets results in the best outcome for all

• There is strong demand for protection products in India – people are worried about the risks they face

• Setting individual targets helps take the business case down to the individual subscriber – removes the “big bet” for telco

• Next step – upsell to freemium and OTC products; we will find out how much the clients really understand!

Thankyou!

www.microensure.com

Richard.leftley@microensure.com