LOOKING INTO THE FUTURE: LEVERAGING NEW DISTRIBUTION CHANNELS FOR MICROINSURANCE

Transcription

1 LOOKING INTO THE FUTURE: LEVERAGING NEW DISTRIBUTION CHANNELS FOR MICROINSURANCE Barbara Chesire-Chabbaga, Lead Consultant Actuarial & Strategy Jo burg, September 27 th 2016

2 Content Disruptive innovations Trendsetters The Kenyan context Mobile phenomenon Mobile money Internet Livestock Tea value chain The Health Paradox Leveraging lessons Emerging innovations Introduction Agriculture

3 Introduction

4 Disruptive Innovations Financial M-Pesa Lipa na M-Pesa M-Shwari Agency Banking Nonfinancial Uber Tech hubs & labs Huduma Centers Beba Pay Upcoming mvisa Facebook/Whatsapp for money transfer Psychometric analysis for loan disbursement Satellite loan vetting for farmers

5 Kenyan trendsetters M-Bima Safari Bima Kilimo Salama Linda Jamii M-Tiba Started in 2010 First mobile insurance platform Started in 2008 Short-travel insurance product Distribution was unsuccessful Started in 2011 Crop insurance bundled with inputs Health product started in 2014 and folded within one year Partnership between Britam and Safaricom Poor product design and low uptake due to distribution model Launched last week Partnership between safaricom and pharmaccess Mobile wallet ear-marked for health

6 Banks 8.1M Informal Groups 2.1M Use of financial services Coops 2.7M MFSP 15.1M MFIs 0.8M

7 75%.of Kenyans have never had an insurance cover

8 Mobile Technology: Use of mobile money and internet

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10 The Kenyan Context Kadogo economy 38 million mobile phone users 90% mobile penetration 16.6 million users of M-Pesa 14 million users of mobile internet 40% of Kenyans own a smart phone

11 Mobile money Kenya has the world s highest mobile money penetration 16.6 million users transact USD 50 billion annually Over 100,000 mobile money agents country-wide Successful due to ability to stay ahead of lagging regulators

12 Opportunities in mobile money Leveraging mobile money agents for distribution Mobile wallets m-tiba: Savings wallet ear-marked for health only unlocked at a registered health care facility; old mutual offering USD 80 personal accident cover we are yet to see the success of this however we believe refinement will need to be done to increase value: e.g. Insured emergencies Lipa na M-Pesa

13 Use of internet 30% of Kenyans use smart phones Mobile internet subscriptions rose 5.9% to reach 14.7 million users Total internet users stand at 23.2 million Internet.org/Free basics Providing a bundle of free basic internet services Initiative by Facebook that plans to bring free access to selected Internet services to less developed countries South Africa and Kenya both participants of the internet.org initial launch however riddled with many controversies including withdrawal of major players in India and Zambia In Kenya internet.org has partnered with Airtel - People in Kenya with an Airtel SIM card can access these services by visiting or by downloading the Internet.org app for Android from the Play Store. Access to the Internet.org app is free. Through Internet.org, you can access a version of Facebook that s free of data charges, as well as other services such as health, news, and sports info.

14 Opportunities for insurance and financial services Consumer education tips and education about insurance Bundling with online services such as free basics Huduma center, e-citizen, IPRS online platform for all government services mvisa looking to take on Safaricom in its home turf. Leveraging smart phone use providing a cheaper platform for money transfer. Is there an opportunity for bundling insurance services?

15 Agriculture Agriculture is the largest employer in Kenya Agriculture is the largest contributor to Kenya s GDP Main sectors include: Dairy Approx 5 million cows and only 39,000 livestock policies Tea 560,000 tea farmers; 700,000 tea pickers; 70 factories but no significant insurance product in this industry Horticulture Financial inclusion is at 69% 93% of farmers still receive their income through cash

16 Opportunities in Agriculture Leverage on agricultural input companies Fertilizer Seed Artificial Insemination not yet been done On-demand cover that provides protection when a farmer most needs it e.g. when the cow is pregnant Including the entire agricultural value chain Tea pickers weather index income protection Other farm workers

17 The health paradox

18 The health paradox History of health financing in Kenya shows that we are still grappling with a solution Products that have been shelved: Bima ya jamii PPP partnership issues Changamka savings wallet a pure savings product for health has no value Linda Jamii a low income product, offered to the wrong market, poorly designed and simply distributed wrong pulled off the market after 21 months this has affected the Kenyan market immensely Insurance companies want to offer health microinsurance but struggling with product design, pricing and distribution channels.

19 New health products M-Tiba safaricom and pharmaccess over 40,000 registered users; savings wallet ear-marked for health only unlocked at a registered health care facility; old mutual is offering USD 80 personal accident cover we are yet to see the success of this however we believe refinement will need to be done to increase value: e.g. Insured emergencies inuka an app based product that can be downloaded on play-store. If you save a minimum of KES 20,000 on their platform you get access to an inpatient limit of KES 200,000 and an outpatient loan of up to KES 20,000 they project to have 40,000 users within 4 months. This is in partnership with Britam. Hello doctor a phone based tele-medicine service that allows consultation over the phone, prescription and bundles a hospital cash at USD 3 per month

20 Opportunities in health Models Provider-based PPP Emergencies only cover Hospital Cash Promising distribution channels Saccos & cooperatives Cashless transport system (accident) Mobile

21 Disruptive Innovations Financial M-Pesa Lipa na M-Pesa M-Shwari Agency Banking Nonfinancial Uber Tech hubs & labs Huduma Centers Beba Pay Upcoming mvisa Facebook/Whatsapp for money transfer Psychometric analysis for loan disbursement Satellite loan vetting for farmers

22 Key messages and take-aways Look out for potential market disruptors The Ubers, Mpesa s, Agency bankings etc. Capitalize on the peculiarity of the market to your advantage Copy & paste of successful models will not always work (e.g. Airtel in Kenya, M-Pesa in SA etc.)

23 Stay ahead of your industry at all costs Do you have an innovation team?