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A A MMemberember of CIC of CIC InsuranceInsurance GroupGroup
THE ROLE OF MOBILE TECHNOLOGY IN MICROINSURANCE OFFERINGS IN
KENYAJack Kiongag
88thth November 2012November 2012
Dar Dar EsEs Salaam, TanzaniaSalaam, Tanzania
OutlineOutline
Mobile Phone Penetration and it’s impact on Micro‐insurance
Mobile Technology in Microinsurance
The M‐Bima Concept
Marketing ‐ Sales & Distribution
Challenges of M Bima Jijenge Savings Plan Challenges of M‐Bima Jijenge Savings Plan
Lessons and Key Insights for the Kenyan Market
Mobile Penetration In Kenya Mobile Penetration In Kenya –– Opening The Door Opening The Door For MicroinsuranceFor MicroinsuranceFor Microinsurance For Microinsurance
2011
2007 Over 8 million
Over 19 million mobile phone users
1999
Over 8 million mobile phone usersLaunch of
18 million Mobile Money
Less than 1 in 1,000 had a mobile phone
Launch of Mobile Money. 52,000 Mobile Money Users
Users
Mobile Technology in Mobile Technology in MicroinsuranceMicroinsuranceThe MThe M Bima ConceptBima ConceptThe MThe M‐‐Bima ConceptBima Concept
CIC M‐Bima Examplep
Operations &p
Administration
Marketing & Distribution
Customer Service &
SupportSupport
Mobile Technology in Mobile Technology in Microinsurance Microinsurance ‐‐ The The CIC MCIC M‐‐Bima ConceptBima Concept M‐Bima started as an automatic airtime premium
collection method in 2010 but evolved to a premium collection platform that leverages on the mobile moneycollection platform that leverages on the mobile money technology
Jijenge Savings Plan the first product launched on M‐Bima in early 2011 It is 12 year endowment plan with a minimalin early 2011. It is 12 year endowment plan with a minimal decreasing risk component and a significant savings element
Unlike conventional policies the surrender value locks inUnlike conventional policies, the surrender value locks in after 6 months but access to funds is 3 years onwards.
Clients can save a daily equivalent of Kshs. 20 ($.23) for a minimum but increasing cover of Kshs 50 000 ($588)minimum but increasing cover of Kshs 50,000 ($588). Premium can be paid in weekly installments of Kshs. 140 ($ 1.64).
Natural death claims subject to a 6 month waiting period Other products being developed to ride on the M‐Bima platform
for both mobile money and airtime
NEW BUSINESS ENROLLMENTNEW BUSINESS ENROLLMENT
Mobile Data Capture (Agent) and Information (Proposal) pushed to web (www.m‐bima.co.ke)
Client pays by M‐Pesa
Payment pushed to webPayment pushed to web
Match between payment and proposal made
Information pushed to back office system
Policy issued
Automatic sms acceptance message to new policyholder
MarketingMarketing ‐‐ Sales & DistributionSales & DistributionMarketing Marketing Sales & Distribution Sales & Distribution M‐Bima is marketed and distributed
through organized networks of small shopkeepers, Mobile Money Stores and other large networks such as transport cooperatives
Promotions are carried out by conducting Market Activation but will use mass media in the future to
t lsupport sales
MarketingMarketing ‐‐ Sales & Distribution cont..Sales & Distribution cont..Marketing Marketing Sales & Distribution cont..Sales & Distribution cont.. Branding to increase physical and mind
process
Capturing information using the mobile key to efficient/effective data capture
F A Obj i Ch ll L L
ChallengesChallengesFocus Area Objective Challenges Lessons Learnt
Underwriting, Operations
A simple to use, fully automated
Inadequate processes and IT
Processes, systems and technology and backOperations
and Administration
fully automated data capture system
processes and IT system. KYC quality a challenge. 50% conversion.
technology and back office operations and customer service must be effective and efficient
RobustDistribution
Recruit, train, motivate
Poor channel management and
Proper understanding of channel dynamics plus an
Network organised networks
support effective distribution plan, management and support system key
Customer engagement
To have a persistency rate
High lapse rate at 50%. Poor training
Constant customer engagement/follow‐up g g p y
of at least 60%g
leading to 33% mis‐selling rate
g g / pessential Expect high lapse rate
F A Obj i Ch ll L L
Challenges Challenges contcont……Focus Area Objective Challenge Lessons Learnt
Products A simple i d
Multiple benefits i
Start with minimum b fi d fattractive and
memorable product
payment options create confusion and unsustainable premiums
benefits and few payment options and escalate appropriately
premiums
Broad target market of
/
To have a wide reach
Inadequate understanding of the
Research key to defining target market, how to
micro/mass market
real target market and the dynamics therein
access, acquire and retain. An effective, intelligent marketing plan & learning diary essentialdiary essential
Promotion Awareness, interest and
Messages were generic and corporate
Specific and targeted promotional programmes
strong brand presence
and testimonials key to creating tangibility
Core benefits (as perceived by clients)Core benefits (as perceived by clients)
h
45.0
50.0
Why did you join M‐Bima?all
savers
30.0
35.0
40.0
15.0
20.0
25.0
0.0
5.0
10.0
Way to build Affordable way Way to make Life insurance Easy and Way to create yyour savings for
the future
yto save
yyour savings
safecover for you
and your family
yconvenient way
of saving through MPesa
ydiscipline to
save
Source: focus groups and phone survey
Lessons for the Kenyan MarketLessons for the Kenyan MarketLessons for the Kenyan Market Lessons for the Kenyan Market
The research, which was done with the support of ILO Micro Insurance Innovation Facility (Matul) provides useful lessons:Insurance Innovation Facility (Matul) provides useful lessons: Strategy for retail voluntary products must be distinctly different from
group/compulsory products. Understand reasons for purchase Identify buyer profile: Marketing targeting efforts/strategy should identify fy y p f g g g / gy y
characteristics of savers, lousy savers and non savers for sales and persistency.
There is a significant proportion of Kenyans ready to have an d/ d f i fl ibl d i hi h i linsured/savings product if convenient, flexible and within their control
(trust factor play due to perception/bad experience) Constant engagement in form of communication, incentives etc. critical to
sustain interest persistency and tangibilitysustain interest, persistency and tangibility. Consider payback for the “lost” savers to enhance trust and tangibility Start with one simple product and escalate timely Manage Perceptions: Accept that product seen to be in competition with Manage Perceptions: Accept that product seen to be in competition with
bank savings products
Lessons for the Kenyan Market cont..Lessons for the Kenyan Market cont..Lessons for the Kenyan Market cont.. Lessons for the Kenyan Market cont..
Messaging important to stimulate savings and understanding of benefitsof benefits
Other Key InsightsOther Key Insights1. Technology adoption very high in Kenya and creates immense
opportunity for microinsurance. 2. Stress‐testing the marketing plan, systems and processes before a
k t l h i i t t t hi lmarket launch is important to achieve scale3. Appropriate visuals (presence) and messaging are key to
persistency4 Freedom and convenience of paying premiums at own time and4. Freedom and convenience of paying premiums at own time and
leisure must be balanced with incentives that encourage saving behaviour
5. Identifying appropriate distribution channels requires non‐y g pp p qconventional approach
6. Distributors expectations must be matched with delivery especially timely remuneration, transparency and constant f db kfeedback.
7. Heavy initial below and above the line activation necessary to create and maintain interest – Be ready to spend!
8 Close performance monitoring in all the areas a key success factor8. Close performance monitoring in all the areas a key success factor