presentation - Munich Re Foundation

Conver'ngfreemiumcustomersatscale
TughralAli,HeadofAfrica
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MicroEnsureoverview!
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Foundedin2002byOpportunityInterna'onal
Receiveda$mul'-milliongrantfromtheBill&MelindaGatesFounda'on
Currentinvestors:AXA,IFC,OmidyarNetworkandSanlam
Serving25+millionpeopleinAfricaandAsia
85%ofourcustomersarenewtoinsurance
90+bankingandmicrofinancepartners
70+insurancepartners
12telecomspartners
4xwinnerofpres'giousFinancialTimes/IFCawardsincludingthe10year
anniversary“ExcellenceinTransforma'onalBusinessAward”in2015
3xKalahariAwardswinners
Wedesign,implementandoperatemicroinsuranceproductsworldwide
Covervariousclassesofrisk;life,inpa'ent/outpa'enthealth,poli'calviolence,
microasset,accidentanddisability
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AirtelAfricaPartnership2014-2015
8millionnew
enrolledpolicy
holdersinjust
12months
Freemiumproductexamples
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Themobileinsurancerevolu'on!
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Mobileinsurancefreemiummodel!
Earnfreelife,accidentand
hospitalcashcoverupto
$2,500whenyoutopup$2
•  Themoreyoutopup,the
moreyouearn
Pay$1permonthand
doublethefreecoveryou
earn
•  Earnupto$5,000inlife/
accidentandhospital
insurance
Buyaddi'onalcoverfora
familymember
•  Buyaddi'onaltypesof
cover;health,handset,
travel,cropetc.
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Insurance$Value
Embeddedleadstopaiduptake!
More$products
Retail$to$all
Retail$to$all
Paid$Higher$
Value$Products
Paid
Added$Coverage
Paid
Added$Coverage
Embedded
Free$Simple$
Products
Free$embedded$
insurance$with$
relevant$customer$
communicaAon
Embedded
Free$Simple$
Products
Embedded
Free$Simple$
Products
Add$paid$coverage,$ Add$hospital$cash
as$customers$
appreciate$the$value$
of$insurance
Paid$Higher$
Value$Products
Paid
Added$Coverage
Embedded
Free$Simple$
Products
Open$to$all$
customers
Paid$Higher$
Value$Products
Paid
Life$/$Personal$
Accident
Embedded
Free$Simple$
Products
Keep$adding$more$
products
Paid$Higher$
Value$Products
Paid
Life$/$Personal$
Accident
Embedded?
Long$term
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Productexample–Ghana“3forfree”
Phase 1 – January 2014!
Monthlyrecharge
!
Lifecover
Accidentcover
Hospitalcash
GHS5–9.99
GHS250
GHS250
GHS25
GHS10–19.99
GHS500
GHS500
GHS50
!
GHS20–49.99
GHS1,250
GHS1,250
GHS100
GHS50+
GHS2,500
GHS2,500
GHS150
!
!
Phase 2 – March 2015!
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Double cover: !
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Pay GHS 1 per month to double your “3 for free”
cover.!
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Enjoy up to GHS 5,000 in life and accident cover
and GHS 300 in hospital cash!
Family cover: !
!
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Pay GHS 3 per month to double you “3 for free”
cover and give the same coverage to a loved one!
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MicroEnsure–TelenorIndia“Suraksha”
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20+million‘opt-in’customersinthefirstfivemonths
sincelaunch
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AuniqueproductinIndia–madeaseasyaspossible
forcustomerstosubscribe
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Requiresnodocumenta'on,nomedicalexam,noage
limit–noexclusions
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Over95%ofsubscribershaveneverhadinsurance
before
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Mul'-lingualofferingacrossthewholeofIndia,
allowinguserstoseamlesslyapplyfor,andmanage
thewholeprocessthroughtheirmobilephone
Demonstratesthatitispossibletosignup,paypremiums
andmakeclaimsusingamobilephone,allwithoutthe
laboriousadministra'onassociatedwithafinancial
productsuchasinsurance.
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Freeproductimpact–2014data!
IncreasedARPUanddecreasedchurnleadstoanexcellentreturnfortheMNO…
AverageRechargeperUser(ARPU)
Churnrates
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
Oct
Nov
Dec
Jan
Feb
Control
Mar
Apr
AllInsured
May June
6.0%
4.0%
2.0%
0.0%
Jan-14
Feb-14
Mar-14
Apr-14
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Freeproductimpact–2014data!
WhilefinancialinclusionandinsurancepenetraIonskyrocketasclaimsarepaid:
18.0%
600,000
16.0%
500,000
14.0%
12.0%
400,000
10.0%
300,000
8.0%
6.0%
200,000
4.0%
100,000
2.0%
0.0%
-
Jan
Feb
Mar
Apr
May
Jun
Conver'ngfreemiumcustomers:
lessonslearned
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Freemiumtopaid!
Choosingsaleschannels
Reach
FieldAgent Retail
CallCentre
ProductUnderstanding
BestopIoncallcentre
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Productexplainedbya“realperson”
Reach3xmorepeopleperdaythanfieldagent
70%ofenrolmentsforAirtelInsuranceinGhana
SMS
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Freemiumtopaid!
Lessonslearned
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Usecustomerbalancedatatodesignpaymentstructure
–  Workedwithtelecomtogothroughhistoricaldata
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Daily payment options must allow for missed payments!
–  Originally 20 daily payments per month, but customers’ balances are too inconsistent for so many
transactions!
–  Solution: increase payment amount, decrease number of payments !
!
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Having a free product in the market for several months, and accumulating a large customer base is vital to
the success of paid:!
–  Large customer base to up-sell!
–  Customers understand the product better!
–  Many paid and publicised claims provide proof that the product works!
!
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Freemiumtopaid!
Lessonslearned
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Characteris'csofsuccessfulsalesleads:
–  Subscribedtofreemiumproduct
–  Ac'veonnetwork
–  Consistentlyhasabalance
–  Hasabalanceatpointofenrolment
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In-housecallcentremoreeffec've,cost-efficient
–  Greatercontrolofscripts,qualityofinforma'on
–  Directconnec'onwithagents,easiertomanagemorale
–  Significantcostsaver,quickeningpacetobreak-even
!
!
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Points to consider!
•  Future of product design!
–  Data mining !
•  Future of distribution design change!
–  Uber?!
•  Future of regulatory impact!
TughralAli
HeadofAfrica,MicroEnsure
Nairobi,Kenya
[email protected]
+254789134154
Thankyou