The challenge of reaching the client
Session 9: Lessons from successful insurance education programmes
“If we are honest with ourselves, insurance in its current form is very boring and most people are not interested. Insurance is an alien concept to our target audience. And if they can’t relate to it, there will be little uptake.” Israel Muchena, Director of Hollard Mozambique, pulled no punches when confronting the challenge of low uptake. In a nod to the upcoming sessions focused on Jamaica, Israel quoted reggae star Jimmy Cliff – “Give the people what they want.”
Giving the people what they want, in the case of Mozambique and the wider Sub-Saharan Africa, means using bantu languages and the folklore tradition of ngano to tell stories of drought and other risks in a language and format that indigenous farmers can relate to. “We came up with an interesting story about understanding risks, and how in the past farmers had tried to come up with solutions. It’s a story all farmers can relate to.” Insurers have got to re-examine their assumptions, said Israel. “Ask not what the smallholder farmers can do for insurance. Ask what insurance can do for smallholder farmers.”
The importance of using language and messages that your target audience can relate to is at the heart of insurance education, said session moderator Camyla Fonseca, Knowledge and Capacity Building Coordinator at the ILO Social Finance Programme. “It goes beyond just awareness raising and knowledge – it’s more about creating financial capability than financial education. If consumers see value, then uptake will increase – but communications and materials are not always adapted to the needs and culture of the target audience.”
Laura Enriquez, Financial Education and Consumer Protection Coordinator at Fasecolda in Colombia, highlighted five lessons learnt from the Viva Seguro financial education programme:
Union is strength – the programme brought together 34 insurance companies, which not only meant they could share costs but could also massively increase their outreach.
The importance of evaluation, diagnosis and adjustment – demand-side studies, behavioural diagnosis and impact evaluation are all crucial in order to evolve and improve.
The use of different information channels and formats for different audiences: website, YouTube, Facebook, brochures, radio programmes and virtual education workshops were all used, with costs as low as USD 0.0004 per user. Social media also had the advantage of bringing the messages closer to target audiences.
Using behaviour change tools, segmented by audience age groups with different approaches for different groups.
The importance of partnerships – as well as the 34 insurance companies, government ministries, the regulator and the ILO were all involved.
Partnerships and coordination is also central to the success of the Insurance Awareness Coordinators Group (IACG) in Ghana. Dr Isaac Agyapong of Safety Insurance Brokers, said its aim was to harmonise insurance education measures and enhance consumer trust in insurance through a national strategy for insurance awareness. “Success relies on segmenting audiences. They all have different needs and understandings,” he said. Crucially, this means communicating in consumers’ native languages – one of the key planks was a live radio campaign in 36 languages. “The importance of radio cannot be overstated,” added Dr Agyapong. “We use radio a lot – not pre-recorded, live! Live works much better – people are engaged, they can listen to experts in real time and take part in phone-ins. And doing it in new languages – that was the icing on the cake!”
Mass communications channels were also key for the Insurance Regulatory and Development Authority of India (IRDAI) when they set up a consumer affairs department in 2010 with a remit to focus on consumer education. Yegna Priya Bharat, IRDAI’s Chief General Manager, highlighted the importance of measuring the impact of education and awareness campaigns: using pre- and post-campaign surveys, IRDAI were able to measure how effective they had been. “The surveys show there has been an increase in awareness between 2013 and 2019,” said Yegna. “We’ve learned three main lessons: the importance of multi-pronged, concerted efforts with different messages for different target groups; the need to speak the language of the people, both literally and figuratively; and that consumer education is a continuous process – you need to use platforms that are cost-effective in the long term.”
Session 10: Distribution and technology
Distribution – whether digital or old-fashioned face-to-face – can make or break an insurance product. As session facilitator Richard Leftley, Executive Vice President International of The Microinsurance Company, succinctly put it, “Distribution is the real challenge in inclusive insurance. There have been cases where really good insurance products with the wrong distribution channels have failed. On the other hand, there have been also cases in which bad insurance products with great distribution channels have succeeded. Hence, the importance of selecting an appropriate distribution channel.”
Cenfri Engagement Manager Kate Rinehart-Smit outlined some familiar key challenges to scaling up: limited reach, lack of access to customers, limited knowledge of customers and high-cost structures. Some, if not all, of these challenges could be mitigated by partnering with tech-enabled distribution partners who can provide insights into integrated payments and communications channels, consumer data and how they use digital financial services. However, she observed, it’s important not to put all your insurance eggs into one distribution basket: diversified business partnerships, even though more complex, means you don’t have to rely on one distribution model.
Extremely low insurance penetration combined with extremely high mobile internet usage prompted the launch of WhatsApp-enabled microinsurance in India, explained Balachandran M K, Head of Rural and Micro Insurance at SBI General Insurance. “The end-to-end enrolment process is entirely done via WhatsApp,” he said, “making it easier for both customers and the insurance company. This approach is the first of its kind and has many benefits – it’s user-friendly, available in many languages, with easy access.” One big advantage is that customers don’t have to download a new app – everything is done within WhatsApp. Despite selling more than 1,000 policies in the first few days, however, the WhatsApp approach is not without its challenges. “We need to improve the design, and the payment process isn’t optimal. We plan to use WhatsApp Pay in the future.”
Distribution is not all about digital platforms, however – as Maximiliano Selva, a Partner with Estácubierto in Argentina explained. To start, they opened five shops – with plans for 15 more – where customers can learn about and buy microinsurance products. “The stores are managed by residents of the community who are trained in sales techniques and microinsurance products knowledge,” he added. “This enhances trust among customers. People don’t buy insurance if they don’t know the brand or if they see unfamiliar faces. That’s why we employ members of the community to manage the stores. Familiar faces are very important!”
In the Philippines, a hybrid approach using a network of 2,500 pawnshops combined with increasingly popular e-commerce platforms is paying off. Cebuana Lhuillier Insurance Brokers currently protects the lives of 11 million Filipinos and offers more than 106 insurance products, said Operations Manager Ghay Lyne Mapano. “76% of the country’s population use the internet and 64% are mobile phone users, and they are increasingly using digital channels such as online shopping, e-money and banking apps, online insurance marketplaces and online booking platforms.” Her key takeaway? “Rethink the way you communicate with your customers. Use channels which cater to their own market niche.”
It’s not a case of either/or, concluded Richard. It’s important to find the optimal mixture between face-to-face and digital channels, since they both complement each other.
The Jamaican Perspective
The ICII focus then shifted to Jamaica, where after a welcome by Insurance Association of Jamaica (IAJ) President Adrian Stokes, the Minister of Finance and Public Service, Hon. Nigel Clarke, gave a keynote outlining the Jamaican perspective.
Minister Clarke pointed out that Jamaica’s economy has proven resilient and is growing fast – although with almost two-thirds of jobs lost due to the pandemic, there is still work to do. The government has been promoting an inclusive recovery, including making insurance accessible to all through a comprehensive policy framework. New insurance regulations embedded into the National Financial Inclusion Strategy will enable insurers to pool risks and bundle products to make them more affordable, as well as defining inclusive insurance, amounts of premiums, maximum time to pay claims to help make insurance more affordable and better value.
“It is up to the private insurance sector to deliver and operationalise the legislation,” he said. “The government will deliver the framework, the private insurance sector must make it work.”
Session 11: The regulatory framework for inclusive insurance
The development of the microinsurance market in Jamaica started around 2009 when the Financial Services Commission (FSC) realised that Jamaica had a potential market of around 2 million people (many more if the diaspora is counted) of unbanked and underserved people with little or no knowledge of risk management.
The first step was to review the Insurance Act, to ensure it could accommodate microinsurance products. Next, with the financial help of the Inter-American Development Bank (IADB) and the experience of A2ii, came extensive consultations with all stakeholders in the insurance sector which led to regulations on composite insurance products (including life and general in one policy), annual premium limits and distribution through non-traditional channels.
Microinsurance is very important for Jamaica and other Caribbean nations – as small countries relying on agriculture, mining, fishing and tourism, they are extremely vulnerable to climate change and to the annual hurricane season. In the face of these challenges, Jamaica has developed protocol starting with preparedness (including information on social media, press, TV and radio); improvement in infrastructure, construction requirements and materials; education; and insurance.
Regional risk management schemes such as the Caribbean Catastrophe Risk Insurance Facility (CCRIF) have enabled members to receive pay-outs after extreme weather events. At the micro level, extensive work with cooperatives has paid off but more work on the regulation side is needed to make parametric insurance available to all. More research to enable fair pricing, together with partnerships between regulators, insurers and development agencies, would also help.
Experience in Jamaica shows that distribution must be familiar, otherwise consumers won’t trust insurance, and if the product is too complex, it won’t sell. Other key lessons learned included the importance of product development focused on targeted population; partnerships among stakeholders; training of supervisors, insurance sector, distributors; raising awareness among customers and the general population; simple and clear policies; bundling; building trust through dialogue; cost-benefit analysis; transparency. And it takes time!
Session 12: Financial Inclusion through GK One Parametric Insurance
Grace Kennedy (GK) is perhaps the largest scheme for financial inclusion in Jamaica. It started its financial services with a partnership with Western Union and delivering remittances services. From the remittance business they went on to offer a comprehensive financial approach that includes payments, banking, loans and insurance. GK has more than 300 locations in Jamaica, and it now serves almost all of the Caribbean region.
One of its main partners is the National PC Bank, a financial cooperative bank delivering loans. Although all lines of business (home improvement, educational and vehicle loans) benefit from insurance, it has also added great value to agriculture loans. Adding insurance to loans was not easy, however – as in other parts of the world, there was a trust problem. In response, GK and their partners have shifted from selling insurance products to talking about protection and cost benefit. GK has also started to build community relationships with CSR projects through the Grace Kennedy Community Development Foundation.
Some takeaways from the session: there is always a good way to build trust even if it takes a long time; education is a must; cross-selling is key to achieving inclusion and understanding; and insurance allows farmers to invest more in their farms and in technology.
Session 13: Financial Inclusion & Microinsurance - The Credit Union Way
There are around 25 Credit Unions (CU) in Jamaica with approximately 1 million low- or low-middle-income members – 57% of them women. Although CU loans represent only 13% of all personal loans and savings from formal financial services, their grassroots approach in urban and rural areas makes them an ideal distribution channel. CUs are at the forefront of financial inclusion, helping promote product development, investments in technology and financial literacy.
CUNA Insurance Jamaica is the largest insurance provider for the Credit Unions and their members. Its philosophy is to provide insurance to low-income people, with easy and low-cost products under the Family Indemnity Plan which covers up to six family members, including critical illness, savings, loan protection and personal accident. CUNA also designed a COVID-19 Relief Fund to help salaried, informally employed and self-employed people who lost their jobs during the pandemic keep paying premiums for six months.
Financial literacy is a priority for the Jamaica Cooperative Credit Union League (JCCUL), in response to one of its biggest challenges: attracting younger generations of members. It runs a financial education programme including reality shows featuring potential young customers who experience what it’s like to be parents, to have financial access, to manage risks and other topics which are not generally part of the school curriculum. The idea is to motivate more young people and influence their families, to become members and to use financial products including insurance.
In the face of competition, CUs are increasing their marketing expenditure and focusing on young people by investing in real-time transactions and online platforms. At the same time, JCCUL has been tapping into the low-income market, making substantial investment in technology and education. However, the main challenge remains attracting younger members.
Main takeaways include: investing in market research and the importance of financial education in the face of competition from banks; partnerships are at the core of success; CUs offer great potential for sustainability through grassroots outreach; pricing and products are specifically designed for their customer base; and deep knowledge of members is a major plus when facing competitors.
Session 14: Digitisation, Financial Inclusion & Microinsurance
WiPay is the Caribbean’s leading payment platform for all – whether banked, underbanked or unbanked. It was created in 2019, but came into its own during the pandemic – for example by offering free terminals for businesses. One entire city in Trinidad & Tobago has gone cashless! WiPay works by generating a QR code which can be exchanged for cash at an exchange desk, through social media, with or without a phone. Successful examples include a cashless farmers market in Jamaica, flight payments in Guyana, cash transfers in Grenada, and a “Cardshopper” partnership with MasterCard.
Financial inclusion is also being promoted by the Bank of Jamaica through its financial literacy programme to empower consumers and promote financial literacy at all levels of society. The programme includes consumer protection and is part of the National Strategy for Financial Inclusion.
Sagicor, the largest insurance provider in Jamaica, aims for ‘meaningful coverage with affordable prices’, providing plenty of access points and ease of use. Sagicor’s success relies heavily on partnerships with employer associations and other similar organisations – for example, the Agricare partnership with the Ministry of Agriculture and Fisheries, which provides health, life, critical illness and personal accident cover. Enrolment can either be digital or manual, as not all customers trust technology – around 85% of clients still prefer the face-to-face approach.
Key takeaways from this session included: the pandemic presenting both challenges and opportunities; financial education being key to addressing low levels of financial literacy; microinsurance as an essential component of the National Strategy for Financial Inclusion; young people being a priority target; the criticality of partnerships; use of non-conventional partners and distributors being key for the private insurance sector; and digitalisation being a must.