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Technology: Improving the enrolment experience

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Technology: Improving the

enrolment experience

Presenter:Sanjay Pande

DirectorAmicus Advisory Private Ltd

Presenter:Pranav Prashad

Microinsurance OfficerMicroinsurance Innovation Facility

Presenter:Camilo Tellez

CGAP Technology and Business Model Innovation Team

Presenter:Eugene Adogla

Regional Operations Manager-AfricaMicroensure

Moderator:Jasmin SuministradoKnowledge Officer

Microinsurance Innovation Facility

4 June 2013

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Discussion Flow

1. Challenges in microinsurance enrolment2. Technologies for enrolment

2.1 Smart cards2.2 Mobile phones

3. Watch points in implementing technology solutions4. Concluding thoughts

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1. The Main Hurdles in Enrolment

Identification

Infrastructure

Education and awareness

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Challenges in enrolment

Identification/ documentation requirement

Unclear forms- long, time consuming

Complex processes- low awareness

Lack of Interaction: who to ask

Liquidity constraints irregular income flows Non synchronous

schedules Prioritisation

TRUST

High costs Lack of channel and

physical infrastructure Insurance agents “low prioritisation” of low-

income markets alternative channels (post

offices, retailers, banks) Clients’ understanding

Client side Provider side

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Clients’ needs and technology requirements

Trust and active communication Does technology enhance or dilute these aspects

Human connection- repeated contact, reminders, physical presence

How well does technology simulate Relevant locations, timing, interface personnel for interaction

responsiveness Facilitate and comfortable environment

Relevant processes- clients 'capabilities and limitations Ease of understanding, transaction and confirmation

Tangible benefits throughout the policy duration Protection beyond the less frequent event or loss Facilitate “Value added” services, linked to the product…

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2.1 Smart card Technology

Current popular applications

IdentityBanking & Financial ServicesAccess controlTransportationTelecommunicationHealthcare

Nos. in circulation: 6.9 bn (Figures for 2012 : Source : Eurosmart-April,13)

Telecom : 5.1 Financial Services : 1.2 Government Healthcare : 0.31 Transport : 0.13Pay TV : 0.13Others : 0.09

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Smart card technology: Benefits Digitisation of base data

De-duplication On-site Activities : No remote

locations Instant enrolment Spot data amendment and

personalization Instant printing and issue Instant uploading addresses

transit related issues Seamless mapping of biometrics

and demographics No mismatch

Instant activation No waiting to avail of benefits

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Hardware

Laptop with webcam

Fingerprints Scanner

Smart card Reader

Printer

Fingerprints Reader

Smart card technology: Hardware and software

Enrolment Software• Identification, collection of demographics & biometrics• Personalization, printing cards issuance• Data collection, conveyance and management Claims Transactions Software• Identification, admission treatment • Data conveyance and management•Financial transactionsOther• data integrity and security

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Smart card: Enrolment process flow

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Smart card implementation

Pilot project supported by the Microinsurance Innovation Facility

Health Insurance Scheme for handicraft artisans, funded by the Government of India Project locations: 3 districts in East India Households Enrolled: 2,768 Hospitals / clinics networked: 44 Claims reported till 19th May, 2013: 1,950 Benefits afforded: Outpatient and inpatient care Focus: Outpatient care

National Health Insurance Scheme ( RSBY)

Health Insurance scheme for the population below the Poverty Line in India Locations: 26 State, about 525 districts Households enrolled: 35 million Hospitals networked: over 9,500 Claims reported: 5.2 million Benefits afforded: Inpatient care only

Pilots in Outpatient care

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Smart card technology: Successes

Reduction in waiting time Credibility enhancement Benefits afforded with no time lag Reduction from 45-60 days to 25 minutes in the Pilot Project

Better enrolment ratio Convenience leads to greater participation Improvement by 8% in the Pilot Project

Reduction in the enrolment cost Optimal utilization of resources Fixed costs defrayed over larger enrolled population Renewal costs minimal Reduction by US $ 0.15 in the Pilot Project

Control over malpractices No multiple cards for one households

Better data management Efficient and reliable capture, conveyance, storage and retrieval

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Smart card technology : Challenges

Limited enrolment period window Many are left out

Migratory population Source location or working location

Data managed at multiple points Multiple Insurers are involved Central Repository of data required

Technology still intimidates many Misgivings about fingerprinting & phototaking Higher levels of client education is needed

Hardware supplies Oligopolistic market

Operational constraints Power supply Internet connectivity

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2.2 Mobile phonesThe Microinsurance Value Chain and Mobile infrastructure

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Microinsurance growth in Africa is mobile

Growth in Africa

2010-2012: 200%

8 of 9 markets outside South Africa with more than 1 million insured have reached that mark through mobile insurance

Source: www.mfw4a.org/insurance/microinsurance-landscaping.html

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Why mobile microinsurance?

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Mobile insurance models

1. Passive Loyalty: Given by MNOs in return of post-paid voice

loyalty Most products are offered free of charge No mobile premium payments or even information

and administration About a third (34%) of the products are free

loyalty models

100%

Tied

100%

Free Bundled

Tiered Compulsory

0%

Facilitator

MNOs aiming for passive loyalty

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Mobile insurance models

2. Active Loyalty:Offered to not just increase loyalty but to raise ARPU by incentivizing various kinds of behaviours. (mobile money transactions, savings balance, etc)Coverage is linked to airtime use or top-up, the frequency of transactions or deposit balance.About a third (38%) have a tiered offering where customers can either choose their coverage level or are awarded different levels depending on use of the core service

Tied Free Bundled

Tiered Compulsory Facilitator

MNOs aiming for Active Loyalty

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Mobile insurance models

2. Paying models:a.Freemium model

Based on premium payments rather than driving indirect revenue through incentivizing activity

Only a couple of freemium models: Tigo Ghana - Family Plan, and Vodacom Tanzania – Faraja

Most send policy information and at least half allow some form of policy administration via the phone

b. Full premium model

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Tigo – Ghana, Tanzania, Senegal

AGENT ASSISTED

Phase 1: Free Life Insurance

Phase 2: Life and Hospi-Cash paid via airtime

MTN - Ghana

AGENT ASSISTED / SELF-ENROLMENT

Mobile Money Life

Yu - Kenya

SELF-ENROLMENT

Phase 1: Free Life & Disability Insurance

Phase 2: Free Life, Disability and Hospicash

Mobile insurance examples from MicroEnsure

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Mobile insurance: YuCover (Kenya)

- Initial Marketing +Education: USSD- KYC Harvesting: USSD

- Initial Sale USSD- Enrolment Confirmation: SMS

- Cover Confirmation and Continuous Marketing + Education: SMS

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Enrolment process with mobile phones

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Technology and process evolution

Mobile tech is great, but care must be taken ...

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Payment mechanisms

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Airtime vs. Mobile Money

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Telecom viability: yuMobile, Kenya – “yuCover is the most successful

product we have ever had for ARPU and churn”

Insurer viability: Vanguard Life, Ghana: “Tigo Family Care Insurance the

most profitable product in the portfolio”

Impact on providers

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Mobile phones: challenges

Telecom viability: “Free” product loses value after 12-18 months Cost of agents in Ghana is too high to sustain Mobile money-only products are currently limited to Kenya,

Tanzania, Uganda, where there are many active mobile money users

Insurer viability: Voluntary, paid-for products attract anti selection, risk rate

must be 3-5X that of free products for same cover

Telecom viability: “Free” product loses value after 12-18 months; Whereas P2P

interaction was crucial in Phase 1 success, it is costly once sign-up growth flattens

Cost of agents in Ghana is too high to sustain; evolution to mobile based enrolment is next logical step to maintaining low-cost sales structure Costs crash by 99%+

Insurer viability: Voluntary, paid-for products attract anti selection, risk rate must

be 3-5X that of free products for same cover; complex products tighter messaging needed on terms of cover; tighter KYC extraction needed standardization by mobile technology complement traditional risk management

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Mobile phones for enrolment: challenges

Illiteracy, poor facility with using VAS beyond voice which should be factored into interface design

Technologies not fail-safe SMS not delivered USSD server down

Need for good backups Human agents Telco service centres

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Payment mechanisms in Ghana: challenges ahead

1. MTN Ghana: • Decision to tie the product to MTN mobile money• MTN explicitly wanted to promote mobile money

signup/activation.• 20,000 customers and uncertain viability

2. Tigo Ghana: • Decision to go for airtime• Tigo the insurance was seen as a voice loyalty

play which has nothing to do with mobile money and sits in an entirely different team

• 270,000 paying customers

The choices reflect the different objectives the companies had with the insurance product.

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3. Watch points in implementing technology solutions

Not use technology for technology’s sake Identify problem and then decide on a technology solution

Have a problem that technology can help solve rather than a technology in search of a problem

Technology not an end in itself- needs support to be successfully implemented

Connectivity challenges Hand held machines vs. mobile phones Process enhancements

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Watch points in technology implementation: Smart card

Infrastructure Power Internet connectivity

Base data Enumeration can be very challenging

Manpower Basic IT skills with enrolment

Buy-in from service providers Deferred payments Pre-packaging of procedures & charges

Information and Education Campaign Localized, high-impact

Hardware Capital intensive , for the first 2 -3 years

Software Smart card -related software: enrolment, claims

transaction, ensuring data integrity for data security (India would be keen to assist)

Migrating from manual to smart card regime

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Watch points in technology implementation: Mobile phones

Enrolment: USSD, SMS, etc. have limits – number of characters in messages, short session times, etc., so…

define what is technically needed strike the right compromises for target market, products squeeze the holistic barest essentials into as simple a number of

steps/deliverables as possible (all T&Cs in one SMS, for example!)

The fewer the steps, the better the customer experience= greater scale!

Outcome is mixed so make sure the model is aligned with the objectives and take into account market maturity and customer understanding of the product.

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4. Concluding thoughts

Technology should be approached critically to ensure that it is not just an appendage to old ways that do not work for achieving scale; new solutions

needed

Technology is not to be viewed as a stand-alone initiative – Multiple programs can piggyback on the smart card platform and must have process synergies

Cooperation between mobile operators, intermediaries and insurance providers can result in innovative business models. It is important each organizations'

objectives are aligned to ensure higher likelihood of success

Technology can significantly impact ability to control and adapt. However, success depends on how people use technology based interventions …. amplifies both good and bad business practices

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Technology: Improving the

enrolment experience

Presenter:Sanjay Pande

DirectorAmicus Advisory Private Ltd

Presenter:Pranav Prashad

Microinsurance OfficerMicroinsurance Innovation Facility

Presenter:Camilo Tellez

CGAP Technology and Business Model Innovation Team

Presenter:Eugene Adogla

Regional Operations Manager-AfricaMicroensure

Moderator:Jasmin SuministradoKnowledge Officer

Microinsurance Innovation Facility

4 June 2013

ON Q&A