Mobile insurance: Key learnings Rehan Butt Country Manager Pakistan & Head of Business Development Asia 2 MicroEnsure overview

• Founded in 2002 by Opportunity International • Received a $ multi-million grant from the Bill & Melinda Gates Foundation • Current investors: AXA, IFC, Omidyar Network and Sanlam • Operating in 12 countries across Africa and Asia • Serving 40+ million people in Africa and Asia • 85% of our customers are new to insurance • 90+ banking and microfinance partners • 70+ insurance partners • 12 telecoms partners • 4 time winner of prestigious Financial Times / IFC awards including the 10 year anniversary “Excellence in Transformational Business Award” in 2015 • Shortlisted for 2016 Financial Times / IFC award in ‘Achievement in transformational finance’ category • 3 time Kalahari Awards winners • We design, implement and operate mass market products worldwide • Cover various classes of risk; life, inpatient/outpatient health, political violence, micro asset, accident and disability

3 Demand for insurance

Realities of life in the mass-market:

• Family death • Illness • Accident • Natural disaster • Lack of income and food security • Exploitation • Marginalization • Patronization 4 Business model 5 Mobile microinsurance history

Tigo Family Care, MTN Mi Life, yuCover, TNM, Tanzania Ghana Kenya Malawi

August March 2011 October 2011 April 2013 2010 Life only Life + PA Life only Life only Paid (MM) Free Free Free + Paid 2 Lives 1 Life 2 Lives 2 Lives

Airtel, , Telenor, Ghana Grameenphone, Pakistan Pakistan

January September November 2014 July 2013 2015 2013 Life, Life only Life only Life only accident, Free Free Free hospicash 1 Life 1 Life 1 Life 1 Life 6 Our time tested approach

• 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

Retail Upsell Freemium Upsell Free Buy additional Pay $x per month cover for a family Earn free insurance and double the member cover up to $x,xxx free cover you earn when you top up $x or enrol Buy additional types of cover: The more you top up, Earn up to $x,xxx in the more you earn health, handset, insurance travel etc. 7 Typical value proposition

Easy access to services from a Products trusted brand Lower cost risk address real protection than needs anywhere else

Simple Processes built Growing suite for the mass of products market

Reliable Customer Policy protection from management risk Value convenience 8 Mobile insurance: market learnings

• Mass market customers do not wake up wanting to buy insurance • The mobile channel is not a quick fix: it can make a bad product worse • Mobile involves systemic risk: product failures can materially impact markets • Customers expect mobile insurance to work like other mobile products, not like other insurance products • Freemium is hard, but a better model Mobile insurance: Success factors Favourable factors

 Over 95% uninsured population in emerging markets

 Tens of millions of subscribers of telcos with little or no access to traditional insurance products

 Strong telco brands which tens of millions of people trust

 Multi-SIM markets and ease of switching from one network to another posing challenges for telcos to think beyond ‘rate race’ to win and retain the clients

Closely knitted mass market communities spreading the word fast through strong word-of-mouth Addressing demand side barriers

Barriers How we fix them? • Low literacy and poor understanding of financial • Radically simple products explainable in local languages products in target market in less than two minutes

• High mortality and morbidity rates • Appropriate risk pricing and keeping the cost low through efficient administration

• Bad document access, distrust of written forms • Developed no-questions-asked and paperless enrollment process

• Administration of small policies driving product cost up • Use of technology to process large number of small and making it an unviable case for telco or end value policies and keeping the overall administration customers in case of paid products cost low

• Clients not trusting insurance products and doubting it • Strong telco brands and fast and visible claims payment ‘too good to be true’ help build clients trust 12 Clear roles and responsibilities

Product marketing (ATL / BTL), monthly subscriber data, Telco insurance premium payment, Tier 1 customer service

Product and process design, pricing, training, customer field engagement, USSD/SMS, Tier 2 customer service, policy MicroEnsure administration, claims management, impact and risk monitoring and KPI measurement

Product and pricing approval, underwriting, local risk carrier Insurance company and regulatory liaison 13 Product design

Insurance must work like any other mobile offering

• Explained in full, in one minute or less • It must be bought, not sold • Exciting for the customer base • Provide fast and helpful customer service • Flexibility to be customised by the service provider at short notice

Mobile insurance defies the traditional insurance rules

No medical Minimal exams exclusions No claim forms

No long / No waiting complicated No ID numbers periods policy documents

14 Robust operations Field engagement: people and technology

“Careful” customer service

Claims payment in under 100 minutes

Risk management: fraud and brand Mobile insurance: Some successful products 16 MicroEnsure – “Suraksha”

• 20+ million ‘opt-in’ customers in just five months since launch

• A unique product in India – made as easy as possible for customers to subscribe

• Requires no documentation, no medical exam, no age limit – no exclusions

• Over 95% of subscribers have never had insurance before

• Multi-lingual offering across the whole of India, allowing users to seamlessly apply for, and manage the whole process through their mobile phone

Demonstrates that it is possible to sign up and make claims using a mobile phone, all without the laborious administration associated with a financial product such as insurance. 17 MicroEnsure – Pakistan Sehat Sahara

• 100k active buyers in just ten months of launch

• The only successful micro health insurance product with easy processes and no condition of panel hospitals

• Requires no documentation, no medical exam, limited exclusions

• Over 95% of subscribers have never had insurance before

• Customers from all over Pakistan including urban and rural areas who sign up, get served and paid claims by way of their mobile handset and Easypaisa mobile account

• Claim payment as fast as within few hours directly into customers mobile account

Demonstrates that it is possible to sign up, pay premiums, make claims and get claim paid using a mobile phone, all without the laborious administration associated with a financial product such as insurance. Thank you