1. The Mobile InsuranceWin-Win-WinAissatou BarroRegional Francophone Director AfricaMicroEnsureNairobi, Kenya

2. The Mobile Insurance Win-Win-WinFinancialInclusionDisruptiveInnovationCommercialViability 3. Todays Agenda Introduction and Overview: Mobile Insurance in Africa MicroEnsure Experience Mobile Insurance Demand and Supply Mobile Insurance Case Studies Conclusion: Realizing the Potential of Microinsurance 4. Introduction and Overview:Mobile Insurance in Africa 5. Micro Insurance: Growth in AfricaGrowth in Africa2010-2012: 200%Outside SA: 17.2 Mlives coveredCoverage by Country8 of 9 markets with >1m lives insured havedone so with mobile micro insuranceIs low penetration a function oflow demand?Source: www.mfw4a.org/insurance/microinsurance-landscaping.html 6. Mobile Insurance: The Freemium Revolution 7. Mobile Insurance Freemium ModelEarn free lifeinsurance up to$2,500 when you topup $2The more you topup, the more youearnPay $1 per monthand double the freecover you earnEarn up to $5,000 inlife insuranceBuy additional coverfor a family memberBuy additional typesof cover: health,handset, travel 8. Why are Telecoms Offering Free Insurance?TelecomValueChurn Reduction(10-25%)ARPU Uplift (6-15%)Direct Revenue(US$0.05-0.20/sub/month)CompetitiveDifference (newproduct class)New CustomerAdditionsBrand and SocialImpact (1,000sof claims paid)LifetimeCustomer Value(Stickiness) 9. Mobile Insurance Market Presence 10. Why do Customers Love Mobile Insurance?CustomerValueSimpleProcesses builtfor MassMarketReliableProtectionfrom Risk,FREEProductsaddress realneedsEasy access toservices froma trustedbrandLower cost riskprotectionthan anywhereelseGrowing suiteof productsPolicymanagementconvenience 11. MicroEnsure Experience 12. MicroEnsure Introduction MicroEnsure is the worlds first and largest companydedicated to serving the mass market with insurance. Fastest-growing insurance organisation in Africa: 11 million worldwide, 5.3 million in Africa 85% of our clients were never before insured Track record of innovation: Winner of three FT/IFC Sustainable Finance Awards One of Africas 20 Most Innovative Companies - 2012Financial Technology Africa Magazine One of Five Development Innovations to Watch in 2013US Council on Foreign Relations Named a GameChanger 500 Business 2014 Shareholders: IFC, Omidyar Network, Telenor,Opportunity Bank, Sanlam, Axa 13. Connecting Distributors and Underwriters- Concept Design What risks do the poor face? How can they be protected from thoserisks in a sustainable way? What are the best delivery channels toserve the largest number of people?- Making it Work Designing suitable products/processes Making the business case to distributionchannels Reducing Operating Expense to makeinsurance affordable for the poor Full policy administration Training and client education Customer service & claimsadministrationAs a microinsurance serviceprovider, we do not fit withintypical intermediary models 14. MicroEnsure ServicesInsurance Project ManagementBusiness Case and Partnership StructureMicroinsurance Market ResearchValue Chain FacilitationInsurance Regulatory LiaisonLegal, Commercial and Service Level Agreement ContentProduct and Process DesignPricing and Actuarial AssessmentIn-Demand Product FeaturesAppropriate Benefit Levels, Terms and ConditionsBrand-Appropriate Marketing ContentRobust Training ContentOperational ExecutionFront-End Client Management PlatformCustomer CareClaims ManagementPolicy AdministrationMonitoring and EvaluationKey Performance Indicator (KPI) ManagementBusiness Growth and RetentionCustomer PerceptionFinancial Reporting and Premium ReconciliationClaims Status and Payment PerformanceRisk ManagementMicroEnsure does not bear the risk today, butwe are considering underwriting in the future.MicroEnsure builds products that a largeaggregator promotes and then provides theinformation and services that enable a localunderwriter to take the risk.All our services are regulated via SLAs andpolicy wordings underwritten by localinsurers; regulators see all our activities.How Clients Contract MicroEnsure:1. Technical service provider to telecom2. Administrator/BPO to insurer3. Consultant to insurer, telecom or broker4. Intermediary, broker or agent 15. MicroEnsure FootprintMicro Health Insurance- Tanzania: KNCU Primary Care Cover- Philippines: Triple 10- Ghana: Credit Health for MFIs- India: Rural, Cashless Inpatient CoverMobile Insurance: Life, Accident, Hospital- Zambia: Airtel- Burkina Faso: Airtel- Ghana: Airtel, Tigo, MTN- Kenya: yuMobile, Airtel- Senegal: Tigo- Malawi: TNM- Bangladesh: Grameenphone- Malaysia: Digi- Pakistan : TelenorAgricultural Insurance for Smallholders- Malawi, Rwanda, Zambia, Ghana, Uganda, Kenya,Tanzania: Rainfall Index Cover- Caribbean: Hurricane Index Cover- Philippines: Typhoon Index CoverCaribbeanAFRICAZambiaMalawiRwandaNigeriaGhanaUgandaTanzaniaKenyaMozambiqueSenegalASIABangladeshPakistanIndiaPhilippinesMalaysia 16. MicroEnsure PartnersMOBILEBANKINGINSURANCE 17. How Does MicroEnsure Grow by 50,000/Day?Product Innovation for the Low-Income Market- Weather Index (2004) Enhanced Credit Cover (2008) Credit Health (2011)- EduSave (2012) Decongestion (2013) Mobile Three for Free (2014)Core Business Growth for Telecoms, Banks and Other Distributors- Achieve ARPU growth, churn reduction, liabilities and asset growth, etcFastest and Simplest Claims Process in the World- Pay claims in minutes in rural areas submitted on handwritten napkins- Paid 50,000 claims in past twelve months; 76% claims ratio in company historyOperations for Social and Customer Impact- Never exclude HIV, pre-existing conditions, or other common exclusions; we build products to pay outSpeed to Market- Largest group policy in African history (Zambia) 8 weeks start to finishSystems Capability- 1.2 m new policies/hour, web-based, fully customizable for all classes of risk12 Years Experience in the Low-Income Market- 200 products launched in 30 countries across Africa and Asia 18. Example: Paying Claims at SpeedTypical ClaimsExperienceLossIncurredPolicy terms arent clear,report has to be made inperson at insurer officeClaimants go throughmany rounds of documentreview with insurer;insurer keeps asking foradditional documentsClock only starts when ALLdocuments received; claimsprocessed through multipledepartments10-15 Days 40-45 Days 72 HoursFirst ClaimReportClaimDocumentsReceivedClaimantFrustrationClaim PaidMicroEnsure1-2 Days 3-5 Days 1-2 HoursCustomer knows exactlywhat cover she has, withno fine print, and claimsare reported easily viaphoneA proactive customerservice process and cleardirections on document/srequired allows forfaster claims submissionMicroEnsure performsmost claims analysisbefore final documentreceipt, earns paymentauthority from insurer50-70 Days from Loss to Payment4-7 Days from Loss to Payment CommunityImpact 19. Mobile Insurance -Demand and Supply 20. Do Low-Income People Want Insurance?Low-Income Sector:Sell core household goods or toolsRemove children from schoolChange or add jobs, increasing riskMove from city back to villageTake on high-interest debtMiddle/Upper Income Sector:Use savings or liquidate investmentsRaise money from communityWork an extra (temporary) jobUse employer coverageTake on low-interest debt The poor face more risk than any other population; they may not know aboutinsurance, but they live with a persistency and variety of risks on a daily basis The poor have many insurance policies today: assets, informal loans, varioussavings spots, community-based coping strategies The job of micro insurers is to offer more efficient risk mitigation tools, which aresimple, accessible, valuable and reliable 21. Assessing Demand for InsuranceBarriers to insurance uptake in Africa:Cost Typical insurance premiums canrepresent 8-10% of a typical incomein mass market populationTrust Insurers are not seen as trustworthydue to product complexity and poorclaims paymentAccess Insurance agents are not sufficient tocover a whole country, and they donot target the poorUnder-standing Clients lack financial, legal, healtheducation to understand coverage,terms and conditionsOur Value Proposition:Cost Offer superior value for money even free or low-costTrust through trusted brandsAccess via mobile through UniversalAccess (USSD, IVR, Apps)Under-standing and begin with simpleproducts 22. Mobile Insurance Demand: Anecdotes from the Field A chief of a rural village hired a coach to bring his people tosign up for insurance Customer in Ghana: I was suffering but maybe God knew,and thats why God brought us this Tigo insurance M-Insurance in multiple African countries has more thandoubled the insured population in the country within 12months, compared 40 years of typical insurance via 20companies Telecom: Insurance will be core for us, like ringtones. Microfinance Bank: Our customers use loans and savings tocope with risk; banking is really just expensive insurance.Demand is not the problem 23. Supply-Side ConsiderationsTypical InsuranceMicro InsuranceProfitBrokerageOpExLossesCore Problem:How do you offerinsurance to people thatface more risk andcant afford to pay thesame premium?Solution:Reduce ComplexityReduce ExpensesReach Scale QuicklyThe cost of delivery and operations puts many microinsurance products outside mass market reach. 24. Supply-Side ConsiderationsTypical InsuranceMicro InsuranceProfitBrokerageOpExLossesRevenue per policy is lower, but microinsurance createsmarkets for current and future growth opportunities.Reducing OpEx:- Pricing- Product Design- Training- Marketing- Policy Administration- Loss Adjustment- Underwriting- Reinsurance- Policy Reporting- Claims Processing- No Excess Costs 25. Supply A Problem of Perspective?Insurers are used to winning business with relationships;Telecoms are used to sophisticated business casesInsurers think in hundreds or thousands of customers;Telecoms think in hundreds of thousands of customersInsurers usually launch 2 or 3 new products per year;Telecoms usually launch 100+ new products per yearInsurers see the low-income market as difficult to serve;Telecoms see the low-income market as ideal to serveInsurers are worried about fraud and anti-selection;Telecoms are worried about talk radio and competition 26. Mobile Insurance Three Case Studies 27. Example 1 Tigo Ghana/Tanzania94% of clients can explain the product42% of Ghanaian public aware of product60% eventually bought an upsell productLives Assured Tigo Free, Paid, and Rest of Ghana4,000,0003,500,0003,000,0002,500,0002,000,0001,500,0001,000,000500,00002011 2012 2013Tigo - PaidTigo - FreeRest of Ghana 28. Example 2 Airtel Burkina/Ghana/NigeriaFree life, accident and hospitalcash insurance if you top up $2/moTop up more, earn more insuranceHospital cash covers inpatient care at anyhospital for any reason: no exclusionsLaunched January 2014, 3 countries so farDozens of claims paid, average 70 minutesClaims ratios stable; fraud is kept low 29. Free Product Impact 2014 DataIncreased ARPU and decreased churn leads to an excellent return for the MNOAverage Recharge per User (ARPU)InsuranceLaunchedOct Nov Dec Jan Feb Mar Apr May JuneControl All InsuredWhile financial inclusion & insurance penetration skyrocket as claims are paid600,000500,000400,000300,000200,000100,000-18.0%16.0%14.0%12.0%10.0%8.0%6.0%4.0%2.0%0.0%Jan Feb Mar Apr May Jun 30. Mobile Insurance Innovations in 2014Largest group insurance policy inAfrican historyLaunched 11 February 2014, project started9 Dec 2013; 8 weeks from pitch to launch2.2 million insured on 1 March 2014 31. Mobile Insurance Innovations in 2014 32. Mobile Insurance Innovations in 2014 33. Mobile Insurance Innovations in 2014Fastest-growing opt-in insuranceproduct in history30,000 sign-ups per dayNo Exclusions, No Age RequirementsCompare:67 years of insurance in Pakistan = 7 millionpolicies7 Months of our product = 2,000,000 policies 34. Example 3 Ecolife Zimbabwe 1 million subscribers purchased in 9 months Demonstrated demand for insurance But: product features were a problem Complicated purchase process, 12-page brochure Subscribers not aware of cover amount Constant 3111 messages led to critical Facebookgroup with 8,000 members 6-month waiting period led to loss ratio of only 0.9% And partnership value wasnt shared equally Trustco charged $1.11 per user per month forinsurance product 25% of African telecom revenue Trustco & EcoNet went to court July 2011 EcoLife canceled by EcoNet in February 2012 35. Conclusion:Realizing the Potential of MobileInsurance 36. Step 1 Whats in it for the Telecom?How is the Chief Marketing Officers annual bonus determined?Revenue Acquire newcustomers Sell more widgets Achieve higher perticket sales Up-sell productsFootfall Increasetransactions percustomer Increase storevisits per month Cross-sell newproducts andservicesLoyalty Reduce churn Consolidatespending Build brand Enhance trust Show socialresponsibilityTip 1: This is not traditional affinity insurance - its placing insurance at the front of aproduct as a marketing tool.Tip 2: This is not a mobile money product at first. 37. Step 2 Dive into the DetailsTest operations for scale, or find scalable partners:Marketing Education EnrolmentPremiumCollectionCustomerServiceClaimsPaymentCan we serve 5million customers ineach of thesestages? If we cant,who can?Can technologyhelp us to doany of thesethings faster andcheaper? 38. Step 3 Plan for Staged GrowthStage 1: Simple Life/AccidentMarket Creation(6-12 Months)Start with free loyaltyproduct to generate fastuptake and introducecustomers to insuranceStage 2: More Complex; Hospi-Cash/Education FeesMarket Development(9-24 Months)Respond to demand formore product offerings asinsurance scales upMaintain client value by connecting tobusiness intelligence or analyst departmentsin telecom: conduct market research, analyzeloss ratios, and make revisions wherenecessaryStage 3: Mine the databaseFull Service Provision(18-36 Months)Target customers withdata: telecom now thecustomer's insuranceprovider of choice for allrisks 39. MicroEnsure Bridging the Gapaissatou.barro@microensure.comRegional Francophone Director, Africa+254 788178906@microensure