Kashf Foundation has been the pioneer in bringing insurance to low-income households in Pakistan. At present, Kashf has the largest market share, around 30%, in provision of microinsurance in Pakistan. Kashf was the first microfinance institution to offer a credit-for-life insurance cover to its clients in 2002. Once Kashf offered the product, it not only had positive spill-overs for clients but also had a large-scale demonstration effect across the microfinance sector and today the credit-for-life product has become an industry practice. Kashf has also demonstrated the business case for the provision of a family-focused women-centric health product through its experiments with health insurance.
Kashf’s experiments with health insurance
Kashf offered the first iteration of the health insurance programme in 2007 in collaboration with the First Micro Insurance Company. The first of its kind, the product had the following features: (1) coverage for the client and her spouse, (2) upfront premium, (3) hospitalisation coverage up to PKR 25,000. While this list of features was not as exhaustive as Kashf had originally intended, since this was the first real foray into this segment by insurance companies in Pakistan, the product was piloted with the intention to add additional features in later years after getting a better idea about product uptake. The product was piloted for a year, and had limited success, after which it was rolled back. Some of the key lessons from this pilot, which were then used in the second attempt of providing health insurance, were as follows;
- Inclusion of children was a key missing component as clients often prioritised their children’s health care needs over their own;
- Paying an up-front premium was a major pain point and was perceived as a loan deduction;
- Maternity and child-birth related illness were the most frequently cited reason for hospitalisation but were not covered in the insurance;
- Clients found exclusions relating to pre-existing conditions difficult to understand which caused dissatisfaction and confusion;
- Claim processing took a long time and required multiple visits by the client to the hospital for documentation which was a major pain point.
A re-plug was undertaken in 2013 taking into account the lessons from the first iteration. Kashf undertook a reassessment of client needs and preferences through semi-structured interviews, ranking exercises, and focus group discussions. Four insurance companies were approached for product development, and Kashf found a strategic partner in Jubilee Insurance which had the vision and commitment to getting the product, delivery mechanisms and price right for Kashf clients. In 2014, the product was piloted across 18 Kashf branches.
To ensure the success of the pilot, Kashf had to innovatively look at marketing, hospital empanelment, and instances premium payment. Since most of Kashf clients in pilot branches had never accessed health insurance because no other provider was offering anything similar, and Kashf staff did not have the experience of selling insurance products, Kashf had to invest significantly in the capacity building of staff and clients. In 2015, 2,600 staff members were part of trainings and refreshers on health insurance, which was supplemented by further refreshers in 2017 with over 1,750 staff members. Client education and awareness raising was undertaken via innovative and interactive means, such as social theatre performances and inclusion of an insurance module in financial education trainings with clients – 100 theatre performances on the theme of health insurance attended by over 10,000 clients were undertaken and over 177,000 women were trained on health insurance via the financial education module.
To reduce inefficiencies and delays associated with insurance claims, Kashf pursued the empanelment of smaller private hospitals and mapped them with its branch network. Kashf staff undertook mobilisation of owners/ administration of smaller private hospitals on the benefits on empanelment and provided guidelines for capacity building to be eligible for empanelment which has led to 196 panel hospitals being available for Kashf clients, compared to 85 which were available at the start of the programme. Moreover, to speed up the claim processing, a permanent position has been created for a medical doctor at the Head Office who re-verifies all client health claims before they are dispatched to the insurance company to reduce errors and linked inefficiencies. A client service cell has also been set up to address queries from clients regarding delays in claim processing.
After extended discussions with the insurance provider Kashf was able to offer staggered payments of the premium instead of the conventional upfront payment. Moreover, Kashf was able to devolve the centralised process of insurance card issuance to its branches by replacing the plastic card with a printed letter of proof of insurance policy. Even as the product is offered across Kashf’s branches, significant time and effort is being dedicated to the smooth upkeep of the product including centrally delivered need-based refresher trainings and time spent by Business Development Officers on (1) guiding clients on coverage, (2) advocating with medical practitioners on behalf of the clients, (3) building rapport and relationship with panel hospitals, and (4) managing claim processing. According to a recent time-mapping exercise undertaken, field staff on average spend about 5-10% of their productive time on claims handling for the product.
Kashf’s Health Insurance Outcomes
At December 2017 closing over 1.4 million individuals were enrolled in Kashf’s micro-health insurance. The product has turned into a competitive advantage for Kashf over other competitors as shown by recent Customer Satisfaction Surveys (July 2017). Cumulatively, 40,064 claims (out of which 55% have been cashless) amounting to over PKR 671 million (out of which PKR 341 million are cashless) have been paid out. An analysis of the health insurance claims processed has shown that more than 69% of the number of claims and 71% of the total claims value was from women. The average claim amount for females was PKR 17,131 while that for males was PKR 15,691. Moreover, PKR 2,721,675 was given as work-compensation to 3,399 families from July 2015 – December 2017 with an average pay-out of over PKR 801 per family.
These are promising trends and further research has shown that for most women this was the first time they had accessed formal health care, which highlights the fact that often women under value their own health, and it was only after the health insurance cover that they addressed some of their primary health care issues. Micro-health insurance has thus provided these women access to high quality medical services, which will reduce both maternal and infant mortality in Kashf’s cohort.
Zainab Saeed is Head of Research and Development at Kashf Foundation.