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Aili Huang

Chris Ng

Jessica Yuan

Lily Peng

UWFA Insurance Case Competition

Team #smooth

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Overview

Background

Issue

Decision criteria

Recommendation

Rural Distribution in China (millions), 2007

56% 46%60%

66%

56% 64%

64%

68%

60%0

20

40

60

80

100

Rural Population Urban Population

Rapid growth in certain cities in China has led to social and wealth imbalance between urban and

rural areas

The Chinese Insurance Regulatory Committee (CIRC) encourages insurers to offer micro-

insurance products to the poor

China Life is both a state-owned enterprise (SOE) and a publicly traded company

Should China Life offer insurance products to the rural market?

If yes, what products should China Life offer?

Social responsibility

Profitability

Provide customized micro-insurance products through pilot project

Renewable & Convertible Term Insurance

Accident Insurance

Life

Non-life

GDP

Insurance Premiums and Real GDP per capita

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Micro-Insurance Overview

DefinitionInsurance designed for the low income market;

Often used as a tool for social improvements

Traditional Insurance Micro-InsuranceClients Low risk

High insurance literacy

Middle to high income

High risk

Low insurance literacy

Low income

Policies Complex products

Many exclusions

Risk-adjusted pricing

Simple products and language

Few exclusions

Group policies

Distribution Licensed brokers and

agents

Non-traditional intermediaries

Premiums Received regularly

Monetary values

Received infrequently

Lower premiums

Not necessarily monetary

Flexible and faster claim process

Evolution of Life

Micro-Insurance Products

About 80% of

claims and

operational costs

are covered by

premiums

Profitability

Increases awareness of

risk management and

savings instruments

Social Benefits

Reduces vulnerability

of the poor to damages

and losses due to

unforeseen events

As an SOE, carries

out the interest of

the government.

Fiduciary Duty

Stimulates core

business operations

through

differentiation and

innovation

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Industry Overview

Threat toNew

Entrants

Availabilityof

Substitutes

BargainingPower ofBuyers

BargainingPower ofSuppliers

CompetitiveRivalry

Porters Five Forces Industry Prospects**

Major Competitors*

China

Life

40%

Ping An

Life

16%

Xinhua

Life

7%

Pacific

Life

10%

TaikangLife

7%

Other

20%

Industry Characteristics

Low market

penetration in rural

areas

Growing demand

2007 Market Share

CIRC supports

participating

companies in the pilot

program

Coexistence of SOEs

and private players

*Source: http://www.chinaknowledge.com/Business/CBGdetails

**Source: http://www.microensure.com/images/library/files/Resources/MicroinsurancePoV_01.12.pdf3

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Projected ProfitabilityMaximize shareholder value by pursuing profitable projects;

Project Profit = Product Profit + SynergyGoal

Rural23%

Urban

77%

China GDP

Target

Provinces

36%

Others

64%

Rural GDP

Premium

Payment

1.37%

Others

98.63%

Target Province GDPAssume premium = RMB 25

China

Life

Un-

penetrated

Market Size

Benefits & claims Increase incurred claims ratio from 70% to 80%

Statutory insurance fund

Policyholder dividends

Decrease to 0

Underwriting, admin & others Increase the ratios to revenue by 50%

Assume rates: 25%39%

Premium Revenue

Expenses: Assumptions

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Synergy

Projected ProfitabilityMaximize shareholder value by pursuing profitable projects;

Project Profit = Product Profit + SynergyGoal

(RMB MM) 2009E 2010E 2011E 2012E 2013E

Product Profit/(Loss)

Revenue 5,155 7,051 9,115 11,287 13,523

Expenses (5,603) (7,664) (9,907) (12,267) (14,698)

EBIT (448) (613) (792) (981) (1,175)

(Net loss) (360) (493) (637) (789) (945)

NI margin -6.99% -6.99% -6.99% -6.99% -6.99%

Synergy

NI - Traditional 43,900 54,751 67,318 82,806 101,906

Synergy 1,536 1,916 2,356 2,898 3,567

Project Profit 1,176 1,423 1,719 2,109 2,622

Investment

professionals believe

corporate social

responsibilities increase

shareholder value by an

average of 2-5%*

Assume synergy of 3.5%

*Source: S. Bonini, N. Brun, and M. Rosenthal, Valuing corporate social responsibility, The McKinsey Quarterly, February 2008

Costs

- 20% 30% 40% 50% 60% 70% 80%

Synergy

5.5% 2292 2213 2133 2054 1975 1896 1816

4.5% 1853 1774 1694 1615 1536 1457 1377

3.5% 1414 1335 1255 1176 1097 1018 938

2.5% 975 896 816 737 658 579 499

1.5% 536 457 377 298 219 140 60

0.5% 97 18 -62 -141 -220 -299 -379

-0.5% -342 -421 -501 -580 -659 -738 -818

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Decision Matrix

About the Matrixo 5 Products are considered.

o Products are designed to match the coverage

demand of the rural market.

o Many criteria were considered but only the 7 most

relevant are selected.

o Criteria are selected based on the interests of the

target market as well as the company.

To develop profitable products that the low-income market would be interested in buying.

Conclusiono Top products:

Term Insurance

Accident Insurance

Goal

Next Stepo Design the chosen products to make it

competitive and profitable.

Criteria ProductValue Social RiskProtection Rate ofRenewal Ease ofDistribution Affordability Understandability

Promptness of

ClaimsSettlement

Total

Criteria Weight 18% 18% 16% 13% 13% 11% 11% 100%

Term Insurance 6 7 8 9 6 8 8 7.33

Accident

Insurance7 9 7 8 7 7 6 7.38

Micro-credit 5 6 8 8 3 7 5 6.01

EndowmentInsurance

6 7 5 7 3 6 5 5.65

Disability

Income5 8 7 5 1 5 2 5.01

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Suggested Products

Products Features Premiums Benefit Advantages

Renewable &

Convertible

Term 5

- Life Insurance

- Allows policyholder at the end

of the term to:

renew for an additional term

or

convert the policy to a

permanent one

Level premium

for each term

with a premium

increase for each

new term(Ex: Premium of RMB

32 for coverage of

RMB 10,000)

Lump

sum

- Insurance for those

unable to buy

permanent plans at the

moment

- Assists rural

policyholders to

consistently obtain

insurance

Accidental Death&

Dismemberment

Insurance

Provide financial support againstthe following as a result of

accidents:

- Accidental death

- Dismemberment of all or part of

a limb

- Loss of sight, hearing & speech

Regular(Ex: Premium of RMB

25 for coverage of

RMB 10,000)

Lumpsum

- Affordable- Financial protection for

the breadwinner of the

household

- Targeting those

working under high

risks

Group

Insurance

- Insurance for the wholevillage

- Lower premium per

person- Reduces distribution costs

- Village leaders act as theagents

Individual

Insurance

- Employs educated youngerindividuals to serve asagents

- Agents are alsoresponsible for promotingand educating generalpopulation aboutinsurance

Premium

Pa

yment

- If monetary payments aredifficult, potential otherpayment methods include:

- Harvest payments

- Paying by trading cellphone air time

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Implementation StrategiesIncreasing Penetration Rate * Keeping Costs Low

Endowment Life

Agriculture

Credit Life

Health Insurance

Property Insurance

Savings Life

Term Life/Personal Accident

Low needs met/ high ease of design

High needs met/ low ease of design

Factors that Help to Increase Penetration Rate Plans for the Future **

Pilot Project

Gradually

increase

customization

of product

offerings

Partnerships

Regulations &Legislations

Technology

(timelyapplicationprocessing)

Monitoring(minimize

fraud costs)

Mobility

Flexibility &Scalability

Customized

Solutions

Marketing, sales, policy administration, claims payment, monitoring

Policy origination and processing, premium collection, administration

*Source: adapted from http://www.iaisweb.org/**Source: World Banks Social Funds Innovations Notes 2008

Technology (ease of payment & renewal)

Distribution Channel

China Life Agents Intermediaries Customers

Family

marketing

Education young generation

Shorter term/

commitment

Pay with crops

Group policy

village leaders

Low productdevelopment costs:

simple product

Savings fromgovernment support

program

Two birds with onestone: can cut downsocial responsibility

contributions in

other areas

Minimizing fraudcosts: adequate

monitoring

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Risks and Challenges

Multiple existing dialects inChina especially in rural areas

Communication and

DialectsDistribution Lack of Awareness

Solutions:

Build positive relationships

with village leaders

Recruit agents originating

from target counties

Some rural areas are physicallyhard to reach

Solutions:

Start the pilot in nearby and

populated rural areas

Send agents on voluntary

and missionary tours

Citizens in rural areas simply donot understand insurance

Solutions:

Develop products based on

familiar commodities, e.g.

crops and farm produces

Simple paperwork

Due to remoteness of location,

its hard to gather accurate data

Lack of Supporting Data Claims Settlement

Solutions:

Start at populated rural

areas to gather information

as the base line

Gradually build up database

Ongoing due claims and

verifications can be inefficient

Solutions:

Provide initial payment right

after claims have been filed

Provide final settlements

within 30 days

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Introduce the two

suggested

products in the 9selected

provinces

Establish

distribution

channels

Increase the

penetration rate

Seek out additional

rural markets

Recommendations

Recommendations

Timeline

Entrance to themicro-insurancemarket in China

Objectivesaccomplished

Accidental Death & Dismemberment Insurance

Renewal & Convertible Term 5 Insurance

Achieve profitability: 1,176 MM (2009E), increasing to2,622 MM(2013E)

Through suggested products, reinforce China Lifessocially- responsible brand image

2008

Finalize product

offerings

Obtain policy

approval from

government

Recruit agents

2009

2010

2011

2012

2013 & beyond

Continue to

implement the

suggested

strategies (e.g.

gradually increase

the customization

of products)

Consider long-

term suggestions

to risk mitigation

(e.g. gradually

build up database

and relationships

with rural areas)

Incorporate

technology tofacilitate

increasing client

base

Remind clients to

renew or switch

to permanent

policies

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Decision Matrix Privately-Owned

To prioritize maximizing shareholders interest while maintaining certain levels of social responsibilities.Goal

CriteriaProduct

Value

Social Risk

Protection

Rate of

Renewal

Ease of

DistributionAffordability Understandability

Promptness of

Claims

Settlement

Total

Criteria Weight 25% 13% 16% 15% 10% 11% 10% 100%

Weight Change +7% -3% +3% +2% -1% 0% -1%

Term Insurance 6 7 8 9 6 8 8 7.32

Accident

Insurance7 9 7 8 7 7 6 7.31

Micro-credit 5 6 8 8 3 7 5 6.08

Endowment

Insurance6 7 5 7 3 6 5 5.72

Disability

Income5 8 7 5 1 5 2 5.01

11

State-Owned: Maintain governments financial and social

interests

Lower expenses from existing government

supports

Lower profit margins

Privately-Owned: More focus in generating revenue

Higher expenses

Higher profit margins

More competition

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Projected Profitability

12

China

Life

Un-

penetrated

Market Size

Premium Revenue

Benefits & claims Increase incurred claims ratio from 70% to

80% 77.50%

Statutory insurance fund

Policyholder dividends

Decrease to 0

Underwriting, admin & others Increase the ratios to revenue by 50% 70%

Expenses: Assumptions

Market share

1,280 50.00% 52.00% 54.00% 56.00% 58.00% 60.00% 62.00%

Cost

100.00% 1015 994 973 952 931 911 890

90.00% 1078 1060 1042 1023 1005 987 968

80.00% 1142 1126 1110 1094 1078 1063 1047

70.00% 1205 1192 1178 1165 1152 1139 1125

60.00% 1268 1257 1247 1236 1225 1215 1204

50.00% 1332 1323 1315 1307 1299 1291 1282

40.00% 1395 1389 1384 1378 1372 1367 1361

Profit margin = -4.98% (from -6.99%)

2009 project profit = RMB 1,165MM (from RMB 1,176MM)

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Strengths Weaknesses

Established extensive

sales force

Large market share in

existing insurance

market; strong brand

BOD consisting of

former government

officials

Opportunities Threats

Low current market

penetration in micro-

insurance

CIRC is supportive forparticipating

companies

Pilot project is

profitable and brings

synergies to the

company

SOEs may have more

preferential treatments

from the government

There might beregulatory barriers to

the micro-insurance

market for private

companies

Ultimate Recommendations Privately-Owned

13

Lack of government

involvement may

disadvantage the

company

Shareholders may

differ in opinions in

terms of CSR choices

SWOT Analysis Changes to Recommendations

Altered weightings of criteria in

decision matrix

Re-evaluated financial viability andprofitability of the pilot project

Considered changes in strengths,weaknesses, opportunities & threats

Accidental Death &Dismemberment

Renewable & ConvertibleTerm 5

Profitability: 1,165 MM(2009E)

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Appendix A: Income StatementIncome Statement of China Life (in RMB MM)

2003A 2004A 2005A 2006A 2007A 2008E 2009E 2010E 2011E 2012E 2013E

REVENUES

Gross written premiums and policy fees 69,334 66,257 81,022 99,417 111,886 130,683 148,962 169,916 193,329 219,756 249,795

Less: premiums ceded to reinsurers (1,571) (1,182) (769) (140) (85) (508) (579) (660) (751) (854) (971)

Net written premiums and policy fees 67,763 65,075 80,253 99,277 111,801 130,175 148,383 169,255 192,578 218,902 248,824

Net change in unearned premium reserves (547) (67) (215) (430) (397) (458) (522) (596) (678) (771) (876)

Net premiums earned and policy fees 67,216 65,008 80,038 98,847 111,404 129,717 147,860 168,659 191,900 218,131 247,948

Net investment and other income 11,667 11,798 18,174 48,464 79,968 86,061 109,977 138,340 171,251 211,991 262,423

Total Revenues 78,883 76,806 98,212 147,311 191,372 215,778 257,838 307,000 363,151 430,123 510,372

BENEFITS, CLAIMS AND EXPENSES

Insurance benefits and claims

Life insurance death and other benefits (8,570) (6,816) (8,311) (10,797) (17,430) (15,606) (17,789) (20,291) (23,087) (26,243) (29,831)

Accident and health claims and claim adjustment

expenses (4,882) (6,418) (6,847) (6,999) (6,343) (7,385) (8,418) (9,603) (10,926) (12,419) (14,117)

Increase in long-term traditional insurance

contracts liabilities (39,966) (25,361) (33,977) (44,238) (45,334) (58,682) (66,890) (76,299) (86,813) (98,680) (112,169)Interest credited to long-term investment type

insurance contracts (6,811) (3,704) (4,894) (6,386) (7,181) (8,361) (9,531) (10,871) (12,369) (14,060) (15,982)

Non-insurance benefits and claims expenses

Interest credited to investment contracts (449) (616) (973) (996) (1,138) (3,081) (3,938) (4,953) (6,131) (7,590) (9,396)

Increase in deferred income (5,942) (7,793) (8,521) (11,607) (9,859) (16,997) (20,310) (24,183) (28,606) (33,882) (40,203)

Policyholder dividends resulting from participation

in profits (1,207) (2,048) (5,359) (17,617) (29,251) (31,480) (40,228) (50,603) (62,641) (77,543) (95,990)

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Appendix A: Income StatementAmortization of deferred policy acquisition costs (5,023) (6,263) (7,766) (10,259) (13,461) (12,780) (14,568) (16,617) (18,906) (21,491) (24,428)

Underwriting and policy acquisition costs (1,294) (1,472) (1,845) (2,415) (2,725) (3,173) (3,617) (4,125) (4,694) (5,335) (6,065)

Administrative expenses (6,862) (6,585) (7,237) (9,339) (11,798) (13,303) (15,896) (18,926) (22,388) (26,517) (31,464)

Other operating expenses (872) (131) (798) (859) (1,651) (1,525) (1,823) (2,170) (2,567) (3,040) (3,608)

Interest expense on bank borrowings (7) - - - - - - - - - -

Statutory insurance fund (85) (96) (174) (194) (219) (221) (252) (288) (327) (372) (423)

Total benefits, claims and expenses (81,970) (67,303) (86,702) (121,706)(146,390)(172,595)(203,259)(238,930)(279,457)(327,173)(383,675)

Share of results of associates - - - - 409 - - - - - -

Net profit before income tax expenses (3,087) 9,503 11,510 25,605 45,391 43,183 54,579 68,070 83,694 102,950 126,696

Income tax expenses (1,180) (2,280) (2,145) (5,554) (6,331) (8,449) (10,679) (13,319) (16,376) (20,144) (24,790)

Net profit - Traditional (4,267) 7,223 9,365 20,051 39,060 34,733 43,900 54,751 67,318 82,806 101,906

Net profit attributable to:

equity holders of the Company (4,252) 7,171 9,306 19,956 38,879 34,572 43,696 54,497 67,006 82,422 101,434

minority interest (15) 52 59 95 181 161 203 254 312 384 472

Synergy - - - - - - 1,536 1,916 2,356 2,898 3,567

Synergy attributable to:

equity holders of the Company - - - - - - 1,529 1,907 2,345 2,885 3,550

minority interest - - - - - - 7 9 11 13 17

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Appendix B: Income Statement Calculations

Income Statement Calculations

2003A 2004A 2005A 2006A 2007A 2008E 2009E 2010E 2011E 2012E 2013E

Growth: Gross written premiums N/A -4.44% 22.28% 22.70% 12.54% 16.80% 13.99% 14.07% 13.78% 13.67% 13.67%

% of reinsurer premium to gross written premiums 2.27% 1.78% 0.95% 0.14% 0.08% 0.39% 0.39% 0.39% 0.39% 0.39% 0.39%

% of net change in unearned premium reserves to

net written premiums 0.81% 0.10% 0.27% 0.43% 0.36% 0.35% 0.35% 0.35% 0.35% 0.35% 0.35%

Total financial Assets 239,507 352,757 473,118 645,052 834,749 847,634 1,083,189 1,362,541 1,686,686 2,087,944 2,584,661

Growth: Total financial assets 105.98% 76.18% 53.64% 40.79% 32.79% 27.79% 25.79% 23.79% 23.79% 23.79%

% of total non-insurance premium income to total

financial assets 14.35% 7.04% 6.16% 10.69% 12.53% 10.15% 10.15% 10.15% 10.15% 10.15% 10.15%

% of expense to net written premium -88.88% -65.00% -67.32% -68.92% -68.24% -69.16% -69.16% -69.16% -69.16% -69.16% -69.16%

Life insurance death and other benefits -12.65% -10.47% -10.36% -10.88% -15.59% -11.99% -11.99% -11.99% -11.99% -11.99% -11.99%

Accident and health claims and claim adjustment

expenses -7.20% -9.86% -8.53% -7.05% -5.67% -5.67% -5.67% -5.67% -5.67% -5.67% -5.67%

Increase in long-term traditional insurancecontracts liabilities -58.98% -38.97% -42.34% -44.56% -40.55% -45.08% -45.08% -45.08% -45.08% -45.08% -45.08%

Interest credited to long-term investment type

insurance contracts -10.05% -5.69% -6.10% -6.43% -6.42% -6.42% -6.42% -6.42% -6.42% -6.42% -6.42%

Amortization of deferred policy acquisition costs -7.41% -9.62% -9.68% -10.33% -12.04% -9.82% -9.82% -9.82% -9.82% -9.82% -9.82%

Underwriting and policy acquisition costs -1.91% -2.26% -2.30% -2.43% -2.44% -2.44% -2.44% -2.44% -2.44% -2.44% -2.44%

Statutory insurance fund -0.13% -0.15% -0.22% -0.20% -0.20% -0.17% -0.17% -0.17% -0.17% -0.17% -0.17%

% of expense to non premium income

Interest credited to investment contracts -3.85% -5.22% -5.35% -2.06% -1.42% -3.58% -3.58% -3.58% -3.58% -3.58% -3.58%

Policyholder dividends resulting from participation

in profits -10.35% -17.36% -29.49% -36.35% -36.58% -36.58% -36.58% -36.58% -36.58% -36.58% -36.58%

% of expense to total revenueIncrease in deferred income -7.53% -10.15% -8.68% -7.88% -5.15% -7.88% -7.88% -7.88% -7.88% -7.88% -7.88%

Administrative expenses -8.70% -8.57% -7.37% -6.34% -6.16% -6.16% -6.16% -6.16% -6.16% -6.16% -6.16%

Other operating expenses -1.11% -0.17% -0.81% -0.58% -0.86% -0.71% -0.71% -0.71% -0.71% -0.71% -0.71%

Effective tax rate 23.99% 18.64% 21.69% 13.95% 19.57% 19.57% 19.57% 19.57% 19.57% 19.57%

% of equity holders to total consolidated entity 99.65% 99.28% 99.37% 99.53% 99.54% 99.54% 99.54% 99.54% 99.54% 99.54% 99.54%

Value-add from CSR 0.00% 3.50% 3.50% 3.50% 3.50% 3.50%

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Appendix C: Financial Analysis of Products

Financial Analysis of Rural Products (RMB MM)

2009E 2010E 2011E 2012E 2013E

REVENUESNet premium revenue 5,155 7,051 9,115 11,287 13,523

Net investment and other income - - - - -

Total Revenues 5,155 7,051 9,115 11,287 13,523

BENEFITS, CLAIMS AND EXPENSES

Insurance benefits and claims (4,124) (5,641) (7,292) (9,029) (10,818)

Non-insurance benefits and claims expenses

Interest credited to investment contracts - - - - -

Increase in deferred income - - - - -

Policyholder dividends resulting from participation in profits - - - - -

Amortization of deferred policy acquisition costs (759) (1,038) (1,342) (1,662) (1,991)

Underwriting and policy acquisition costs (188) (258) (333) (413) (494)

Administrative expenses (477) (652) (843) (1,044) (1,251)

Other operating expenses (55) (75) (97) (120) (143)

Interest expense on bank borrowings - - - - -

Statutory insurance fund - - - - -

Setup expenses - - - - -

Total benefits, claims and expenses (5,603) (7,664) (9,907) (12,267) (14,698)

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Appendix C: Financial Analysis of Products

Net profit before income tax expenses (448) (613) (792) (981) (1,175)

Income tax expenses (88) (120) (155) (192) (230)

Net profit (360) (493) (637) (789) (945)Net profit margin (%) -6.99% -6.99% -6.99% -6.99% -6.99%

Net profit attributable to:

equity holders of the Company (359) (491) (634) (785) (941)

minority interest (2) (2) (3) (4) (4)

Rural products calculations

Net premium income (RMB MM)

Forecast GDP (RMB B) 29143.3 33219.6 37892.5 43113.9 49007.3

% Rural GDP to Urban GDP 30% 30% 30% 30% 30%

Forecast Rural GDP (RMB B) 6725.38 7666.06 8744.42 9949.362 11309.38

Weighted avg % premium payment to income 1.37% 1.37% 1.37% 1.37% 1.37%

% rural population targeted 35.75% 35.75% 35.75% 35.75% 35.75%

Penetration rate 25% 30% 34% 37% 39.00%

Market share of China Life 62.62% 62.62% 62.62% 62.62% 62.62%

Net premium income (RMB MM) 5154.9 7051.11 9115.36 11286.54 13522.81

Benefits, Claims and Expenses

% of expense to net premium revenue

Benefits and claims -80.00% -80.00% -80.00% -80.00% -80.00%

Life insurance death and other benefits

Accident and health claims and claim adjustment expenses

Increase in long-term traditional insurance contracts liabilities 0.00% 0.00% 0.00% 0.00% 0.00%

Interest credited to long-term investment type insurance contracts 0.00% 0.00% 0.00% 0.00% 0.00%

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Appendix C: Financial Analysis of Products

Amortization of deferred policy acquisition costs -14.73% -14.73% -14.73% -14.73% -14.73%Underwriting and policy acquisition costs -3.66% -3.66% -3.66% -3.66% -3.66%

Statutory insurance fund 0.00% 0.00% 0.00% 0.00% 0.00%

% of expense to non premium income

Interest credited to investment contracts 0.00% 0.00% 0.00% 0.00% 0.00%

Policyholder dividends resulting from participation in profits 0.00% 0.00% 0.00% 0.00% 0.00%

% of expense to total revenue

Increase in deferred income 0.00% 0.00% 0.00% 0.00% 0.00%

Administrative expenses -9.25% -9.25% -9.25% -9.25% -9.25%

Other operating expenses -1.06% -1.06% -1.06% -1.06% -1.06%

Setup expenses

Additional % to selected expenses 50.00%

Effective tax rate 19.57%

% of equity holders to total consolidated entity 99.54% 99.54% 99.54% 99.54% 99.54%

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Real-time connectivity

(2008) Aviva has implemented straight-throughprocessing that allows it to issue a policy within 24hours of the application data being entered at any ofits Indian micro-finance partner Basixs 220branches.

(2007) In India, IFMR Trust Holdings and HDFC ErgoGIC use radio-frequency identification (RFID) tags tominimize insurance claims fraud.

Mobility

(2008) Tata-AIG and ICICI-Lombard use vans toroam the rural areas of India, educating consumersby showing videos that explain the benefits and

workings of micro-insurance.

Importance of stream-lining processes

In 2008, the ILO found that transactional systemsthat streamline processes such as customerregistration, claims management and theefficient flow of information are particularlyimportant to micro-insurers.

Without them, it said, the automation of userinterfaces, and the addition of knowledgemanagement, product design and business

intelligence, will simply add costs withoutimproving services to customers.

Flexibility enabling agents*

(2008) IFFCO-Tokios agents, working in remoteareas, use digital pens to quickly convert theirhandwritten notes into formal policy

applications. The pen data is transferred viaGPRS or Bluetooth to the companys web-basedplatform for processing.

Appendix D: Innovation & TechnologyExamples of Successful ImplementationSeamless Integration of Technology

*Source: http://www.microensure.com/images/library/files/Resources/MicroinsurancePoV_01.12.pdfA-7