Report - 13th International Microinsurance Conference, 7 - 9 November 2017, Lima, Peru

Plenary 3 - How tech data and analytics can shape the future of microinsurance

By Marie-Christine Bélanger

In this session, the role of data and technology is evaluated and its contribution to the future development of microinsurance envisioned from three perspectives: a research centre, insurance providers, and a customer relationships agency.

Digital technologies and business approaches applied to the insurance industry are popularly known as Insurtech. The use of Insurtech to deliver microinsurance in emerging countries was identified by the South African research organisation Cenfri as a promising solution. After analysing 157 initiatives around the world, there are still five challenges that need to be addressed (see Figure 16) than in Cenfri’s view. Insurtech is an interesting avenue but is it the panacea? Two insurance providers and a customer relationships agency presented their challenges.


Mzwandile Mtshali, Managing Executive Hollard Insurance, South Africa

One-stop shop
In South Africa, Hollard Insurance is a champion of partnerships. Through these partnerships, it offers microinsurance to more than 5 million policyholders. For Hollard, customer experience is the key. Its products are designed around customer life events or stages, and tailored to the insurance needs at each stage. This customer interaction through partner organisations in the field remains its focus, while Hollard explores and develops a number of digital approaches, such as a mobile platform to connect, bank and insure (one-stop shop – see Figure 17).

Hollard also continuously analyses data related to product development, claims management and fraud, customer lifecycle management, sales and distribution, and risk selection and pricing. New methodologies are often learnt and tested to improve customer experience and performance indicators. The biggest challenge remains embedding these new solutions within the business. To do so, a multifunctional project team is essential.

 

Smart tech, not high tech
BIMA is an insurance provider that uses mobile technology to bring easy-to-use and affordable insurance and health services to low-income families. Since 2010, it has reached more than 24 million customers in 14 countries. Over 90 % of these customers live on less than 10 dollars a day. The BIMA business model relies on partnerships with mobile operators, an award-winning platform delivering a great user experience, dedicated agents providing product distribution and education, and high-value products such as insurance-led product bundles that include insurance, medical advice, preventive care, medication discounts and delivery, and electronic health records. In order to reach such a high number of customers in emerging markets, BIMA has put an intense focus on data and technology.

Technology is used to solve problems, not just to fit in with the business solution. It must have a purpose – and be smart tech rather than high tech. See Figure 18. Recent technology innovations in BIMA include electronic claims processing using WhatsApp, video consultation for physician assistance in Pakistan, and chatbots for subscription. Even though technology is important for BIMA, people are still a key component. There are more than 3,500 BIMA agents globally, and they are providing trust, education and awareness to their customers. 

 
Left to right: Mia Thom, Technical Director, Cenfri, South Africa; Neha Bhatia Ramdas, Global Director of Sales, Juntos, United States; Mathilda Ström, Deputy CEO, BIMA, United Kingdom; Mzwandile Mtshali, Managing Executive Hollard Insurance, South Africa; Doubell Chamberlain, Managing Director, Cenfri, South Africa

Juntos is a customer relationships agency that uses data analytics and technology to build digital relations between a company and its customers. Juntos reaches the customer using a simple SMS sent by a chatbot. Behind the SMS there are complex data analyses as well as an everchanging strategy to identify what works best (see Figure 19).

Juntos has conducted various pilot projects with financial institutions. In these projects, increases were achieved for Juntos-treated customers in loan application rates (4 times), in average monthly transactions per user (8 %), and in average monthly current account balances (45 %). Juntos is keeping an eye on developments in technology to be ready for “the next communication channel” and how it may be deployed to assist client organisations. 

 

"If you target microinsurance on a massive scale, focus on data and technology in order to make it work."

Mathilda Ström

"When embedding technological solutions within a business, it is important to rely on multifunctional project teams."

Mzwandile Mtshali

 

 

Lessons learnt

  • Subscription payments using mobile operators are not the panacea. Most of the time, customers don’t have a balance in their account, and the payment frequency does not seem to be easily adaptable. The industry must find an alternative payment channel. 
  • Data analytics can be used in business analysis as well as product development – for instance, to evaluate key performance indicators, develop more targeted products, or to detect fraud.
  • Listening to customers helps develop new products that are more targeted and responsive to their needs, such as health insurance bundled with medical advice, preventive care, medication discounts, and health records.
  • Enable clients now to make claims with Whatsapp. Use technology to improve a process and solve a problem rather than trying to fit a cool technology into your business solution.

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