Upload
phunghanh
View
224
Download
2
Embed Size (px)
Citation preview
Mobile innovations in insurance Presentation to African Insurance Distribution &
Bancassurance Conference
Cape Town, SA – 12 to 14 May 2013
Outline
Setting the Scene – innovations story in Kenya & lessons
In Banking
In Mobile phones
The Insurance story
UAP experience and lessons
The next frontier
The change in Kenya’s Banking Landscape – the coming of Equity
The Mobile phone revolution in Kenya – and Safaricom’s role
Setting the scene: Learning from others
Late nineties/early 2000’s
• Main banks started mass closure of branches
• Closed many accounts that couldn’t reach minimum balances
Total numbers of Kenyans with bank accounts plummet
• Less than 1m with Bank Accounts by 2001
In the 21st Century
• A Bank Account became a status symbol
Banking: State of the Industry
Starts opening branches where the main banks were closing them
Meanwhile a small struggling building society shows up
• No minimum balances
• No ATMs – welcome to ‘the bank’
• Its name Equity – means equalizing people
It is the largest bank in Kenya
Today; less than 10 years later
• Over 7.5million accounts
• Asset base of ZAR 25 Billion
• Profits ZAR 2.4B
Banking: The Case of Equity Bank
In 2000 Kenya had only one Mobile phone company
• Government owned
• Less than 30,000 subscribers
• Expensive lines – Kes 250,000 (R 25,000)
• That company was called Safaricom
Only one fixed line operator
• Less than 500,000 subscribers – most of them businesses
• And ‘occasionally worked’
A phone line was a status symbol
• And a government tool of control
The Mobile phone experience: Safaricom
Kencel the 1st private network chose to satisfy the ‘corporate market’ first …
To the disappointment of many with ‘pent up demand’
Government brought in a strategic investor into Safaricom
Safaricom chose the Retail market … an instant hit with the masses!
Numbers grew quickly - beyond forecasts and reforecasts
Today has 70% of all lines and over 90% of all billings
And Mpesa – which transfers more money in a day than Western Union in a year – 21 m users
A phone line is now a necessity
Then … Liberalisation … and Safaricom
Innovations: mobile money Mpesa (USD 3b in deposits); Mobile bank
accounts – M-Shwari (1 million accounts in less than 6 months); mobile
apps in almost anything
Over 40% of Kenyans own a bank account
• From less than 10% 10 years ago
• > 70% of adult population
31 million mobile phone lines i.e. 78% penetration
• < 500,000 lines 11 years ago
• Mobile money and related services transformed financial services
The two, Equity and Safaricom
• have had the greatest impact on Kenya’s renaissance in the 21st century
Supported by:
• Political & economic liberalisation
• And infrastructure development
The impact: Equity and Safaricom
Kenya largely an ‘informal’ economy
• Of total work force
• Only 11% in formal employment – 2.5m
• 39% in informal businesses – SME’s
• 39% in agriculture and pastoralism
• The rest – fully unemployed
• Barclays, Stanchart, Standard Bank and yes .. Kencel were targeting only 11%
• Equity, Safaricom chose 89% of the market
• And more focus on 78%
Informal does not mean micro
• Kenya’s market requires a ‘different’ not an ‘informal’ approach
• And the mobile phone is the greatest tool to reach them
Why this success? Understanding Kenya
As the Banking and Mobile revolution was happening …
The insurance industry remained untouched
Total penetration remained around 2.5%
Insured population grew from 5% to 7%
Compared with 40% for banks
Or over 78% for Mobile phones
Insurance not a status symbol
But an ‘unnecessary evil’
During the same time – some companies collapsed
Then the industry started questioning itself
About Insurance
Taking away policyholder money &
confidence
In 2007 industry association did a major customer research – the uninsured market
Key findings
• Customers don’t understand insurance
• Products have no relevance – remember the 11% focus
• Or are not accessible (especially in informal or rural areas)
• And please pay claims!
A battle to respond started
• But there is no Equity or Safaricom …. yet !
• At UAP we are trying and a few others are … but its hard to change old habits quickly enough
Industry efforts
We decided
• To simplify insurance
• Expand our market to the ‘informal’ market
• With relevant products
• Serve the uninsured market
• Easily understood
• Simple to roll out & administer
• And relevant distribution mechanisms
• That reaches customers at their convenience
• Reduces cost of distribution
• While holding onto the ‘formal’ market products
The two flagship
experiments …
• Kilimo Salama
• SalamaSure
The next experiment
• AIfyaImara (Health Insurance Product)
At UAP Insurance:
The Mobile Phone
• Amazing reach
• 16.2 m internet users
• 1m broadband users
• 2m formal sector employees – multiple access
• The rest – on mobile
• Cheaper & cheaper smart phones
• Amazing tech innovations
The social media revolution
• Redefining how we live and connect
• And solve our problems
The Common denominators
Kilimo Salama: Weather Index Insurance for small scale farmers
2012 Winner: Financial Times/IFC Sustainable Finance Awards for Technology in Sustainable Finance
What is weather index based insurance?
Weather station measures conditions
No farm visits = low admin costs
Relation rainfall & crop growth using agronomic models
Covers defined shared weather risks (drought, excess rain, frost, weather related disease)
If weather station shows loss, then all insured farmers are paid, irrespective of on-farm loss
Farmers encouraged to take care of their farm
Quick disbursement of payouts
Example Agronomic model
How does Kilimo Salama work? (continued)
How does Kilimo Salama work? (continued)
19
Claims Settlement Process
Marketing & Communication Communication Channels
Field days
Farmer group trainings
Radio show
Telephone helpline
Focus group discussions
Insured 200 farmers in first pilot in 2009
11000 farmers in 2010; 23,000 in 2011
45,000 farmers in 2012
Projected 80,000 in 2013
Modest premiums on first pilot
Premiums of over Kes 70 million (R 7m) in 2011
Success Highlights: What has Kilimo Salama Achieved
The Products Mix:
• Striking a balance between Indemnity based and Weather Index Products- Not all weather risks can be transferred through index based solutions e.g. Fire and Hail.
Insurance Infrastructure:
• Insufficient weather data, number of automatic weather stations, Quality historical weather data
Basis risk: Defined as when a famers suffers loss and the index does not show that there
is a payout.
Marketing and Distribution:
• Due to many farmers involved scaling up is only viable if registration and payouts are paperless.
• Distribution through Agro-vet shops; Insurance is not their core product – Insurance registration process must be fast and convenient
• Regulatory approvals for alternative distribution channels
• Greatest success has come from use of aggregators.
Key Challenges
UAP Salamasure
What is
Salamasure?
Salamasure is a mobile phone driven Personal Accident Insurance Cover
Provided by UAP Insurance
Winner: 2012 African Distribution Innovator of the Year Award
Scope of Salamasure Cover
Accidental death
Permanent disability as per the continental
scale
Medical expenses
arising from the accident
Last Expense
Cost of Artificial Limb
No Age limit
Salamasure Cover Benefits
Standard
• Loss of Life & Permanent Disability Kshs100,000; Funeral & Appliances Kshs10,000, Medical Kshs50,000
(Kshs. 200)
Silver
• Loss of Life & Permanent Disability Kshs200,000; Funeral & Appliances Kshs10,000, Medical Kshs50,000
(Kshs. 250)
Gold
• Loss of Life & Permanent Disability Kshs500,000; Funeral & Appliances Kshs10,000, Medical Kshs50,000
(Kshs. 400)
Unique features of Salamasure It’s a mobile
phone driven PA Product
There are no forms to fill when
applying
Clients are identified by their
ID,PP,BC number, Cell
phone number and a unique Policy number
Flexible monthly premium payment
period
Convenient premium payment mode through the
mobile phone
Claims notification and
settlement through the
mobile phone
Flexible choice of benefits
Salamasure – USSD code version Accessing Cover
Dial *827# from your Safaricom line
• View Cover Options
• Register & Purchase Policy
• Report a Claim
• View Account
Cover Details
Confirmation of cover is via a text message
Upon cover purchase the insured is requested to register a beneficiary
Insured can change his/her cover options / beneficiaries via the phone
Salamasure Renewing Cover
A renewal notice is sent to the
insured via a text message
The insured will either make a
direct payment or change their
cover option and make the new
payment
A text message with the cover
extension confirmation will be sent to the
insured
Dial *827#
1. Select the option ‘Report a claim’
2. Enter ID Number & Date of Accident
3. Claim is validated, Claim number is generated & sent to the insured
4. A UAP representative will contact the insured
Salamasure Reporting a Claim
Salamasure User Experience
Over 233,000 visitors hit the portal in 4 months.
Enrolled customers over 23,000
Over 3,000 paid up
1,100 active month on month customers
… And this is only a pilot!
Salamasure
UAP Pays the 1st claimant (In hat)
Salamasure
1st Claimant and his wife
SALAMASURE
Activation Pictorials
Salamasure Market Activations
Salamasure Market activations
Salamasure Mall Activations
Salamasure Street Activations
UAP Credit Services Flexible payment options
Lessons from Salamasure
USSD technology cumbersome
• Time limit
• Separate steps cost money
• Limited information space
• Response: Development of UAP Android Application
• Response: Enable group registrations through the internet under one sim card
Extra mobile money payments step leads to dropped sales
• Response: Integration of the Application with a payment gateway (with M-Banking interface) to eliminate extra payment steps
• Response: Include Auto renewal payment on Mpesa platform
Customer hesitation
• Response: Aggressive consumer Education program
• Response: Develop Loyalty program for customer retention
Only one product on channel
• Response: Inclusion of additional products that are even more relevant to the consumer e.g. AfyaImara (health insurance product). Other products in the pipeline
The next frontier Inclusion of our Medical insurance products: AfyaImara
AfyaImara AfyaImara
Junior
AfyaImara County
AfyaImara Seniors
AfyaImara mobile app/online How it works
• Customers select their
cover plan of choice
either on the Android
mobile app or on the
UAP website
• They enter their details
(Name, Age,
Dependents, etc)
• Premium is calculated
• Payment is made
Member
is on
cover!!!
UAP App: More than a Distribution Channel
Building the volumes
Social media activations
Retail outlet distribution - Partnership with Uchumi Supermarkets & National Oil
Call / information centre support
Marketing – combine digital & normal
Consumer education
About UAP
Currently in 5 countries:
Geographic distribution continues to
grow in line with vision to be a
Pan-African financial services provider
ABOUT UAP Over 80 years in the Kenyan market
Financial strength
• Top three in volumes
• Biggest balance sheet
• Consistently top in profitability
Credit Rating AA- highest in EA
Insurer of the Year Kenya 2012
African Distribution Innovator of the Year 2012
Winner IFC/FT Technology in Sustainable Finance 2012
FiRe Award winner 10 Consecutive Years
About UAP Insurance Over 80 years in the Kenyan market
UAP Philosophy
Our Vision
• Africa’s Revolutionary financial services company
Our Mission
• Enhance quality of life by
• delivering peace of mind and financial freedom
• through an exceptionally motivated team
• that delivers what customers want – when and where they want it!
Our Values
• We build lifelong relationships
• We do what we say, and say what we do
• We are a pleasure to deal with
• We are passionate about our work, and it shows!
Thank You…
UAP, Bishops Garden Towers, Bishops Road,
PO Box 43013-00100, Nairobi, Kenya. Tel 285000, Fax 2719030, E-mail [email protected]
www.uapkenya.com