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MicroEnsure Overview: by the Numbers
Founded in 2002 and largely grant funded; 2007 Bill & Melinda Gates
2012 conversion to for-profit social enterprise
Investors: IFC, Omidyar Network, Sanlam, AXA
Design, implement and operate micro insurance products worldwide
42+ million customers in Africa/Asia
85% of customers are new to insurance
Cover various classes of risk: life, inpatient/outpatient health, crop, political violence, micro asset, accident/disability, slum clearance
50,000 claims paid in past year
90 banking and microfinance partners
70 insurance partners
12 telecom partners
4-Time Winner of Financial Times/IFC Awards
Ghana: where it all began!
MTN paid for insurance
8.8m subs <10k insured
Tigo free insurance
3.4m subs
1m+ embedded
>250k paid
• MTN had much larger client base• Started with paid only• Tigo achieved much higher paid customer base over same period starting with embedded
Concept: working with telcos
• Clients do not wake up wanting to buy insurance but they do wake up worried about the risks they face.
• Telco’s suffer from pressure on ARPU, sim switching and high churn
• We aim to combine these two facts to create a win-win
• Phase 1: introduce “free” insurance– Telco pays premiums for clients that spend a minimum amount of ARPU each month
– The more ARPU you spend the more insurance you earn next month
– Clear KPI’s with product closed rapidly unless indirect revenue gains exceed costs
• Phase 2: freemium upsell– Having paid claims quickly in Phase 1 we normally see 25%+ clients willing to pay a small fee to retain
the free product but add cover for an additional family member
– This gets people paying for insurance whilst also retaining the loyalty benefits
• Phase 3: retail upsell– We introduce a range of products to the market we have created leading to direct revenue for the
telco & drives usage of mobile money platform
Airtel Africa: major deployment of free insurance
8 million new enrolled policy
holders
Product Example – Ghana “3 for Free”
• Phase 1 – January 2014
• Phase 2 – November 2014
• Double Cover – pay GHS 1 per month to double your 3 for Free Cover: enjoy up to GHS 5,000 in life, accident cover and GHS 300 hospital cash
• Family Cover – pay GHS 3 per month to double your 3 for Free Cover and give them same
coverage to a loved one
Monthly Recharge Life Cover Accident Cover Hospital Cash
GHS 5 – 9.99 GHS 250 GHS 250 GHS 25
GHS 10 – 19.99 GHS 500 GHS 500 GHS 50
GHS 20 – 49.99 GHS 1,250 GHS 1,250 GHS 100
GHS 50 and up GHS 2,500 GHS 2,500 GHS 150
Role & Responsibilities across value chain
Partner Value Chain
Airtel
Product marketing (ATL/BTL), monthly subscriber data, insurance
premium payment, Tier 1 customer service
MicroEnsure
Product & Process Design, Training, Customer Field Engagement, USSD/SMS, Tier 2 Customer
Service, Policy Administration, Claims Management, Impact and
Risk Monitoring, KPI Measurement
Insurance Company
Product and Pricing Approval, Underwriting, Local Risk Carrier,
Regulatory Liaison
Did it work? ARPU Impact
• There is a clear impact on ARPU for insured customers
• Impact is high during the month of subscription and reduces gradually over time.0.00
5.00
10.00
15.00
20.00
25.00
Oct Nov Dec Jan Feb Mar Apr May June
Cu
rre
ncy
ARPU Comparison – Insured vs Control
Control All Insured
Insurance Launched
Oct Nov Dec Jan Feb Mar Apr May
4th Quartile ARPU
Control Insured
Oct Nov Dec Jan Feb Mar Apr May
2nd Quartile ARPU
Control Insured
Oct Nov Dec Jan Feb Mar Apr May
3rd Quartile ARPU
Control Insured
• Low ARPU customer behaviour is by far the most impacted by free insurance product• The three months from launch saw a uplift in revenue for the Telco• Again there is consistently higher revenue from those enrolled than those not enrolled in
insurance product• Biggest uplift was seen in low ARPU customers• 23% of those auto enrolled who previously spent under $2 now spend above $2 threshold -
significant affect on ARPU & revenue
Three for Free: effect on recharge
Churn Impact
Country Churn of Insurance SubscribersChurn of OverallCustomer Base
Ghana 0.22% 6.2%
Nigeria 0.04% 5.9%
Burkina Faso 0.29% 6.1%
Niger 1.03% 4.2%
Madagascar 0.07% 5.6%
Churn by Country
Churn is significantly lower for insurance subscribers, even when some customers are automatically enrolled (as in Ghana, Burkina Faso, and Niger).
Looking back
• There was a positive business case for all stakeholders – including the client
• Free insurance did help educate the masses
• We were able to upsell the majority
• However – the model is a really “hard sell” for the telco having to place a big bet before finding out if it worked
• We needed a way to reduce the risk for the telco for future deployments
Telenor Suraksha - India
Case Study
Timeline
• MicroEnsure had worked with Telenor in Asia before (Grameenphone, TP, easyPaisa etc)
• We were contacted in June 2015 to help create a loyalty product
• Data gathered in July and detailed business case created by MicroEnsure for Telenor
• Go-decision made in August by Telenor
• We had eight weeks to build and implement
• Product launched end of October 2015
Telenor’s strategic focus
1. Gain market share: new SIM cards are provided with two months free insurance. They are then offered a “target” top up amount in order to maintain free cover.
2. Drive ARPU: all existing customers are made a “Target offer”, they can opt in but to qualify for insurance they have to increase top up and hence this drives revenue.
3. Rebrand from Uninor to Telenor, the brand that cares.
The business case for this product is therefore immediate and at the individual subscriber basis.
• Product type – Life insurance paying a lump sum in the event of death due to any cause
• Age limits – Minimum 18 years with No maximum age cap
• Enrolment channels – Branded Retail, POS, SMS, USSD, IVR & Call center
• Claim settlement turnaround time – Within 7 days of document completion
• Penetration – Entire market in 68 years : Around 46 Mn (3.9% of
total population)
– Suraksha in 150 days : Over 20 Mn Customers
• Insured clients profile – 100% prepaid subscribers, most of them living in rural areas. Over 95% of all clients never had any form of insurance before
Telenor Suraksha Product Overview
No documentation - No medical exam - No age limit - No exclusions
Recharge Slab
(for Target List
generation)
Insurance Cover
1 – 49 > Rs. 20 Incremental
Recharge
Min. Insurance of Rs. 5000.
Post Rs. 5000, based on Actual
Recharge done.
50 – 99 > Rs. 20 Incremental
Recharge
Actual Recharge Amount *
100
100 – 299 > Rs. 40
Incremental Recharge
Actual Recharge Amount *
100
300 – 499 > Rs. 50
Incremental Recharge
Actual Recharge Amount *
100
Lessons from Suraksha
• Clear strategic objectives with measurable targets results in the best outcome for all
• There is strong demand for protection products in India – people are worried about the risks they face
• Setting individual targets helps take the business case down to the individual subscriber – removes the “big bet” for telco
• Next step – upsell to freemium and OTC products; we will find out how much the clients really understand!
Thankyou!
www.microensure.com