Exploring market opportunities for insurance in...

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Exploring market opportunities for insurance

in Mozambique

3 March 2016 – INTERIM RESULTS

Eighty20 Consulting

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Agenda

Insurance usage

Insurance access

Mozambique – a FinScope overview

3 D

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Agenda

Insurance usage

Insurance access


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Awareness of financial terms such as “insurance” and “instalment” is

generally very low across the market

AWARENESS / KNOWLEDGE OF FINANCIAL TERMS (Adults 16+)

14%

31%

6% 18%

11%

16%

26%

11%

15%

16%

69%

43%

82%

66% 72%

0%

20%

40%

60%

80%

100%

Total Urban Rural Male Female

Heard of this and know what this means Heard of this but does not know what it means

Never heard of this No response

8% 18%

3% 10% 6%

12%

20%

8%

13% 11%

80%

61%

89%

77% 82%

0%

20%

40%

60%

80%

100%

Total Urban Rural Male Female

“Insurance” “Instalment”

Source: FinScope Mozambique 2014

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Just 494,000 adults (3.4%) are currently making use of one of the formal

insurance products and services below, with usage higher in urban areas

(8.3%) than rural areas (1.0%)

INSURANCE PRODUCTS AND SERVICES (Adults 16+)

0.1%

0.1%

0.1%

0.1%

0.1%

0.2%

0.2%

0.2%

0.3%

0.3%

0.5%

0.5%

0.6%

0.6%

0.7%

0.9%

0.9%

0.1%

0.1%

0.2%

0.2%

0.2%

0.1%

0.1%

0.4%

0.1%

0.2%

0.3%

0.2%

0.2%

0.3%

0.2%

0.2%

0.4%

0.5%

0.3%

0.4%

All risk insurance for specific assets *

Home Insurance (contents or building)

Professional Liability Insurance

Credit insurance

Travel insurance

Disability Insurance

Other Insurance

Personal medical aid scheme

Hospital plan

Credit Life **

Personal Insurance for Funeral

Personal Accident Insurance

Employer subsidized medical aid

Employer covered accident insurance

Third party Motor insurance (compulsory)

Comprehensive Motor Insurance

Employer covered medical aid

Funeral insurance covered by employer

Pension / retirement fund

Life insurance

Have now

Used to have


* e.g. laptop, cell phone, etc.

** Insurance protecting your family members from paying your debts if you should die or become incapacitated

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The salaried segments have the highest insurance product usage while less

than 1% of rural farmers are currently insured

CURRENTLY HAVE ANY INSURANCE PRODUCT OR SERVICE (% of adults, by segment)

0.3%

4%

9%

18%

33%

Rural farmers

Self-employed urban viable

Young and educated urban

Salaried rural

Salaried urban


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A large proportion of those that are currently insured say it because it is

required by law. This is followed closely by insurance preventing worry as

well as being ‘better safe than sorry’

REASONS FOR CURRENTLY HAVING INSURANCE (Adults 16+, Have insurance)

0.4%

2%

3%

6%

10%

14%

19%

20%

29%

31%

36%

You are worried about fire or flooding

It is something you have always had

Other

You are worried about theft

The cost is very low compared with the consequences of the loss

Does not know

Someone else pays for it so not my decision

You cannot afford to lose the thing that is covered

It is better to be safe than sorry later

Being insured stops you worrying

It is required by law to have it


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For those individuals that at one stage had a formal insurance product or

service but no longer have it, nearly a quarter say it is because they cannot

afford it

REASONS NO LONGER HAVE INSURANCE (Adults 16+, Used to have at least one insurance product or service)

0.4%

1%

1%

2%

2%

5%

5%

9%

9%

10%

10%

10%

24%

25%

Using insurance brings bad things or problems onto you

Does not trust it or the companies

Protects self in other ways

It is not good value for money

Has had a bad experience in the past where the claim was denied

Uses own money if there is a problem

Insurance is for rich people

Does not know how or where to get it

Does not see the need for it

Does not know how it works

Other

Have nothing to insure

Cannot afford it

Does not know


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For those individuals that have never had a formal insurance product or

service, more than half say it because they have not heard about insurance

REASONS DON’T HAVE ANY INSURANCE (Adults 16+, Never had any insurance product or service)

1%

2%

2%

2%

2%

4%

4%

6%

12%

13%

26%

29%

56%


Does not know


Someone else in the family or household has it





Cannot afford it



Has never thought about it

Has not heard about it


Note: Reponses with less than 1% are not shown on the chart

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Restricting the analysis to those individuals who don’t know what insurance

is, the overwhelming majority cite lack of awareness as the reason for not

having insurance

REASONS DON’T HAVE ANY INSURANCE (Adults 16+, Never had any insurance product or service)

2%

1%

5%

1%

2%

4%

10%

9%

16%

15%

18%

31%

22%


Does not know


Someone else in the family or household has it





Cannot afford it






Note: Reponses with less than 1% are not shown on the chart

1%

2%

2%

2%

2%

4%

4%

6%

12%

13%

28%

29%

60%

UNDERSTAND “INSURANCE” DON’T UNDERSTAND “INSURANCE”

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There seems to be a general lack of awareness of insurance and insurance

organisations

OVERALL PERCEPTION OF INSURANCE ORGANISATIONS (Adults 16+)

9%

10%

10%

4%

4%

4%

3%

3%

7%

10%

6%

8%

3%

3%

6%

4%

7%

4%

3%

7%

8%

3%

10%

7%

4%

10%

27%

26%

25%

26%

29%

30%

27%

27%

28%

26%

25%

26%

27%

61%

58%

61%

63%

63%

63%

63%

62%

62%

54%

62%

62%

60%

0% 20% 40% 60% 80% 100%

Buying their cover makes financial sense

Dealing with them gives you status in the community

Getting things done with them is easy

It is quick for them to give you a policy

It is quick to have an insurance claim paid out

The charges are reasonable

The process for getting a policy is easy

The queues are long / you have to wait a long time to be served

Their brokers or representatives are trustworthy and knowledgeable

They are for rich people and not for poor people

They do not pay out for your property like you expect them to

They treat you with respect

They use words that you do understand

Agree Disagree Don't know Don't have opinion


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Restricting the analysis to those individuals who know what insurance is,

fewer respond with the answers ‘don’t know’ or ‘don’t have opinion’

OVERALL PERCEPTION OF INSURANCE ORGANISATIONS (Adults 16+)

21%

19%

25%

17%

13%

17%

15%

9%

23%

9%

13%

27%

8%

10%

17%

9%

12%

15%

11%

12%

20%

8%

31%

18%

6%

26%

22%

21%

21%

21%

23%

21%

22%

21%

24%

19%

19%

21%

21%

48%

43%

46%

50%

50%

51%

51%

50%

45%

41%

51%

46%

45%

0% 20% 40% 60% 80% 100%















8%

8%

8%

2%

2%

2%

2%

2%

5%

10%

5%

5%

3%

2%

5%

3%

6%

3%

2%

6%

6%

2%

7%

6%

4%

7%

27%

27%

26%

27%

30%

31%

28%

27%

28%

28%

26%

27%

28%

63%

60%

64%

65%

66%

65%

65%

65%

65%

56%

64%

64%

62%

0% 20% 40% 60% 80% 100%

UNDERSTAND “INSURANCE” DON’T UNDERSTAND “INSURANCE”


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Just 6% of adults have made provision for their own or a family member’s

funeral. Of those that have, personal funeral insurance dominates

MADE PROVISIONS TO COVER FUNERAL EXPENSES OF SELF OR OTHER FAMILY MEMBERS (Adults 16+)

Yes 6%

No 94%

YES: PROVISIONS MADE NO: REASONS WHY NOT

5.1%

12.5%

22%

29%

50%

Other

Do not know

Have thought about it but cannotafford it

I did not know I could do it

Never thought about it

3.3%

9.8%

11%

16%

30%

36%

Funeral association

Savings scheme

Agreement with Church

Funeral insurance covered byemployer

Other

Personal funeral insurance


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0%

9%

10%

16%

18%

21%

36%

Claim insurance

Cut down on household expenses

Use savings

Other

Don't know

Borrow money

Sell something

Claiming insurance is barely mentioned as a coping mechanism in the event

of an expenditure shock, even for the small proportion who cite damage to

vehicles as a risk


* Adults that reported the event as a risk

COPING MECHANISMS (What adults would do if they were faced with the following circumstances*)

POOR HARVEST

1%

6%

10%

16%

18%

22%

38%

Claim insurance


Use savings

Don't know

Borrow money

Other

Sell something

FLOOD DESTROYING HOUSE/PROPERTY

1%

10%

14%

16%

17%

22%

35%

Claim insurance


Use savings

Don't know

Other

Borrow money

Sell something

THEFT, FIRE OR DESTRUCTION OF HOUSEHOLD/PROPERTY

5%

10%

11%

18%

20%

22%

28%

Claim insurance


Other

Use savings

Borrow money

Don't know

Sell something

THEFT, FIRE OR DESTRUCTION OF CAR/VEHICLE

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1%

8%

9%

13%

22%

23%

29%

Claim insurance

Use savings


Other

Borrow money

Sell something

Don't know

Claiming insurance is barely mentioned as a coping mechanism in the event

of an expenditure shock, even for the small proportion who cite damage to

vehicles as a risk


* Adults that reported the event as a risk

COPING MECHANISMS (What adults would do if they were faced with the following circumstances*)

DEATH OF MAIN WAGE-EARNER

0%

9%

10%

16%

17%

25%

28%

Claim insurance


Use savings

Other

Borrow money

Sell something

Don't know

LOSS OF JOB OF MAIN WAGE-EARNER

1%

11%

11%

13%

20%

23%

28%

Claim insurance

Use savings


Other

Don't know

Borrow money

Sell something

ILLNESS OF ACCIDENT OF MAIN WAGE-EARNER

7%

11%

18%

19%

24%

27%

Claim insurance


Other

Use savings

Borrow money

Don't know

Sell something

PAY OR CONTRIBUTE TO A FUNERAL

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13% of adults belong to one or more informal community groups where

people get together to save or borrow money amongst each other. The most

common type of group is Xitiques


INFORMAL FINANCE: MEMBER OF A COMMUNITY GROUP (Adults 16+)

0.2%

0.5%

1.1%

1.6%

12.2%

Funeral association

Informal family group sharing a family account

Community based savings group and credit group

General xitique

Xitique

(37 respondents)

(27 respondents)

(17 respondents)

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Membership of informal community groups is more prevalent in urban areas;

20% of adults living in urban areas belong to one or more groups while for

adults living in rural areas this proportion is 10%



URBAN RURAL

0.1%

1.3%

0.2%

1.3%

8.9%

Funeral association

Community based savings group andcredit group

Informal family group sharing a familyaccount

General xitique

Xitique

0.5%

0.8%

1.1%

2.4%

18.9%

Funeral association



General xitique

Xitique

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Membership is slightly higher for women than for men; 14% of women

belong to one or more groups while this is the case for 12% of men



MALE FEMALE

0.3%

0.4%

0.9%

1.4%

13.7%

Funeral association



General xitique

Xitique

0.2%

0.6%

1.3%

1.9%

10.6%

Funeral association



General xitique

Xitique

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There are some cases where individuals belong to more than one informal

community group of the same type

MEMBER OF INFORMAL GROUP: NUMBER OF GROUPS PER TYPE (Adults 16+, Member of the respective group)

95%

98%

94%

81%

85%

5%

2%

6%

19%

15%

0% 20% 40% 60% 80% 100%

Funeral association

Informal family group sharing a family account

Community based savings group and credit group

General xitique

Xitique

One More than one

Percentage of adults

belonging to group

12.2%

1.6%

1.1%

0.5%

0.2%


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The predominant reason cited for belonging to more than one informal

group of the same type is to get more money


REASONS BELONG TO MORE THAN ONE INFORMAL GROUP OF THE SAME TYPE (Adults 16+, Belong to more than one informal group of the same type)

3%

15%

31%

73%

Other

Reduces the risk because I do not lose all my money in a single go

Meets my needs, because the money comes at different times

To get more money

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For those individuals that are members of Xitiques, few mentioned paying

for unexpected events as their previous payout usage

MEMBER OF XITIQUE: WHAT DID YOU DO WITH THE LAST AMOUNT RECEIVED? (Adults 16+, Member of a Xitique group)

0.3%

2%

4%

4%

4%

12%

17%

22%

22%

33%

Paid an expected event (marriage)

Bought medicine

Paid an unforeseen event (illness, death)

Paid debts

Paid school fees

Bought stock for business

Bought food

Saved it

Other

Bought household goods


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Payment for unexpected events such as an illness or death is more

frequently cited for those Xitique members living in rural areas

MEMBER OF XITIQUE: WHAT DID YOU DO WITH THE LAST AMOUNT RECEIVED? (Adults 16+, Member of a Xitique group)

0.3%

2%

3%

3%

5%

13%

13%

14%

26%

36%

Paid an expected event (marriage)

Paid an unforeseen event (illness, death)

Bought medicine

Paid debts

Paid school fees

Saved it

Bought food

Bought stock for business

Other

Bought household goods

URBAN RURAL

0.3%

6%

1%

5%

3%

31%

21%

11%

18%

31%


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13% of individuals who are members of a Xitique, Xitique General or ASCA

group say this is to help when there is an unexpected expense such as an

illness or death; 13% say it is to help when there is another emergency

MEMBER OF XITIQUE / XITIQUE GENERAL / ASCA:

REASONS BELONG TO THIS GROUP OR THESE GROUPS (Adults 16+, Member of a Xitique or Xitique General or ASCA group)


0.8%

1%

2%

2%

3%

3%

4%

6%

8%

8%

11%

13%

13%

15%

23%

30%

43%

Because you inherited the position from parent

Because you could not get money or help elsewhere

The group buys your household or farm goods when it's your turn

To borrow money

Forces you to participate and support your group members

It is expected for people of your clan / village / community

Other

You can get money easily when you need it

To increase income by lending

To exchange ideas and information

To invest in bigger things by pulling money / resources together

To help when there is another emergency

To help when there is an unexpected expense

To socialize / meet your friends

To save

To keep money safe

To have a lump sum to use when it is your turn

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0.2%

0.4%

1%

1%

2%

3%

4%

4%

7%

9%

10%

11%

13%

20%

22%

34%

36%

To borrow money

The group buys your household or farm goods when it's your turn

Because you could not get money or help elsewhere

Because you inherited the position from parent

It is expected for people of your clan / village / community

Other

Forces you to participate and support your group members

You can get money easily when you need it

To increase income by lending

To help when there is an unexpected expense

To exchange ideas and information

To invest in bigger things by pulling money / resources together

To help when there is another emergency

To socialize / meet your friends

To save

To have a lump sum to use when it is your turn

To keep money safe

4%

3%

1%

0.5%

5%

4%

2%

9%

9%

17%

6%

11%

14%

10%

24%

52%

23%

Helping to pay for unexpected expenses or for other emergencies is more

frequently cited by individuals living in rural areas who are members of a

Xitique, Xitique General or ASCA group than those who live in urban areas

MEMBER OF XITIQUE / XITIQUE GENERAL / ASCA:

REASONS BELONG TO THIS GROUP OR THESE GROUPS (Adults 16+, Member of a Xitique or Xitique General or ASCA group)


URBAN RURAL

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For those individuals that are not members of any informal community

groups, the majority cite affordability as a key constraint

NOT A MEMBER OF AN INFORMAL GROUP: REASONS WHY NOT (Adults 16+, Not a member of any informal group)

2%

3%

5%

8%

9%

11%

15%

32%

57%

You bank with a financial institution

It requires too much time

You don't trust members of other related families

I don't see the benefits of joining such a group

You don't trust other members

Other

Not interested

You don't know about them

You don't have any money


26 D

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2%

5%

2%

11%

7%

9%

38%

12%

58%

Affordability is mentioned as a key constraint in both urban and rural areas,

with a lack of awareness also a large factor for individuals living in rural

areas

3%

5%

6%

10%

10%

11%

18%

22%

56%

You bank with a financial institution

You don't trust members of other related families

It requires too much time

Other

I don't see the benefits of joining such a group

You don't trust other members

You don't know about them

Not interested

You don't have any money

URBAN RURAL


NOT A MEMBER OF AN INFORMAL GROUP: REASONS WHY NOT (Adults 16+, Not a member of any informal group)

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24% of individuals who are currently saving say they are doing so for a medical emergency, 19%

for another type of emergency, 12% to provide for their family after they die, 4% for retirement or

old age, and 3% for funeral expenses. These events could also be covered by insurance

WHAT ARE YOU CURRENTLY SAVING OR INVESTING FOR? (Adults 16+, Currently saving*)

3%

3%

4%

4%

4%

6%

6%

7%

8%

8%

12%

12%

19%

24%

35%

42%

Vacation or holidays

Funeral expenses

Buy farming equipment or supplements

Farming or fishing expenses (e.g. seeds, fertilizers, fishing nets)

Retirement or old age

Buy a bicycle, motorcycle, car, truck or other transport

Buy appliances, furniture or goods for household

Buy livestock

Start or expand your business

Education or school fees

Buy or build a house for you to live in it

Providing something for your family after you die

For an emergency that is not medical

For a medical emergency

Living expenses for the time when you have no money

To increase my income


* This includes formal saving mechanisms such as savings accounts with a bank and informal saving methods such as keeping cash

at home

Note: Responses with less than 3% are not shown on the chart

28 D

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Agenda

Insurance usage

Insurance access


29 D

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The Access Frontier Methodology developed by David Porteous enables an

identification and quantification of access barriers. It segments those who

do not yet use a product into various market zones

Source: Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor”

by David Porteous

Total market

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

30 D

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FT

To build an access frontier you need to start with a specific product category,

and then gather fairly detailed data on the product specs. The funeral policy

product from a well-known insurance company is outlined below

Basic product description

Funeral policy product sold as part of a company package (not a stand-alone product)

Source: Discussions with insurance company

Premiums and cover

Collection of premiums: Payroll stop order

Premium options: Quarterly, semi-annual, annual

No minimum premium

Grace period: 2 months

Covers spouse, children, parents

Minimum and maximum amounts of cover offered: Min MT 10,000 and Max MT 500,000

Waiting period: 2 days

Marketing

Advertising via billboard, e-mails, brokers, agents, hospitals

Advertised in Portuguese and English

Client requirements

Personal identification document

Must have a bank account

Maximum age is set at retirement age (65 for men, 60 for women)

Channels

Take out the policy via brokers or agents

Must go to the branch to sign the forms

Must go the branch to make a claim

Branch locations: Maputo, Nampula and Tete

31 D

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FT

Access Frontier Methodology: Step 1

Define the total market


by David Porteous

Total market

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

32 D

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FT

This funeral policy is aimed at salaried individuals who would have access to the

product as part of a package from their employer. The analysis is therefore restricted

to the salaried urban and salaried rural market segments

TARGETED MARKET SEGMENTS (Adults 16+)

SALARIED URBAN SALARIED RURAL

Main source of income is salary or

wage from a company or government

Live in urban areas

% of the segment females: 31%

Main source of income is salary or

wage from a company or government

Live in rural areas

% of the segment females: 50%

33 D

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FT


Define the current market


by David Porteous

Total market Salaried adults 16+

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone Salaried urban

698 620

Salaried rural

353 823

34 D

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FT

Fifteen per cent of the total market (salaried adults) have a formal funeral insurance product or are

making provisions to cover the expenses of a funeral, either through personal funeral insurance or

through funeral insurance covered by the employer. For the salaried urban market this proportion

is 17% while for the salaried rural market it is 12%

DEFINING THE CURRENT MARKET (Salaried adults 16+)

FORMAL INSURANCE

PRODUCTS

PROVISIONS MADE FOR

FUNERAL


Note: Formal insurance products from Q9.1 and provisions for funeral from Q9.6

14 688

74 644

12 867


Funeral insurance coveredby employer

Salaried rural

Salaried urban

16 258

85 630

24 606

14 017



35 D

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FT


Identify those in the market redistribution zone - There are no indicators available in the survey

data relating to poverty and deprivation, therefore no redistribution zone has been identified


by David Porteous


Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

Salaried urban

119 087

Salaried rural

41 476

Salaried urban

579 533

Salaried rural

312 347

Salaried urban

698 620

Salaried rural

353 823

36 D

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FT


Explore the potential market


by David Porteous


Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

0 Salaried urban

119 087

Salaried rural

41 476

Salaried urban

579 533

Salaried rural

312 347

Salaried urban

698 620

Salaried rural

353 823

37 D

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FT

What would an individual need to apply for this funeral policy?

WHAT WOULD YOU NEED TO APPLY FOR THIS FUNERAL POLICY?


AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS

• Applications and

claims are done

at the branch

TRUST

• Sufficiently high

levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

38 D

RA

FT

Age



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

39 D

RA

FT

The funeral policy product is only offered to men up to 65 years of age and

women up to 60 years of age (retirement age for both)


AGE (Salaried adults 16+, Do not have a funeral policy)

4%

7%

11%

7%

47%

36%

52%

43%

46%

47%

32%

44%

3%

2%

1%

3%

2%

1%

1%

6%

3%

5%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Rural: Female

Rural: Male

Urban: Female

Urban: Male

16 - 20 21 - 34 35 - 60 61 - 65 66 + Unspecified

40 D

RA

FT

Documentation



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

41 D

RA

FT

The majority of the potential market have an identity document or passport to use as

identification – 94% in urban areas and 81% in rural areas. Interestingly, very few have

a salary slip even though they claim to be salaried employees

5%

11%

17%

21%

23%

28%

92%

None of the above

Title deed of house / building

Salary or payslip

Passport

Water bill

The electricity bill

Identity document (BI / DIRE)


DOCUMENTS HAVE IN OWN NAME (Salaried adults 16+, Do not have a funeral policy)

18%

2%

3%

8%

4%

6%

79%

URBAN RURAL

42 D

RA

FT

Bank account



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

43 D

RA

FT

The individual must be banked in order to access the product as premiums are collected via

payroll stop orders. Premiums can be collected quarterly, semi-annually or annually, therefore

regular / stable income is not essential and has not been included as a barrier to access

Have a bank account

77%

Don't have a bank account

23%


BANK ACCOUNT STATUS (Salaried adults 16+, Do not have a funeral policy)

URBAN RURAL

Have a bank account

48%

Don't have a bank account

52%

44 D

RA

FT

Affordability



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

45 D

RA

FT

TBD – Waiting for confirmation of product specs to determine an

affordability constraint

46 D

RA

FT

Making formal products affordable is a challenge in a country where income

levels are so low

PERSONAL MONTHLY INCOME (Salaried adults 16+, Do not have a funeral policy)

2%

45%

42%

4%

0%

0%

0%

7%

0%

48%

49%

0%

0%

0%

0%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Don't know

Less than 5 000 MT

5 001 - 25 000 MT

25 001 - 50 000 MT

50 001 - 100 000 MT

100 001 - 200 000 MT

500 001 MT or more

Refused

Rural Urban


47 D

RA

FT

Physical access



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

48 D

RA

FT

The survey provides information on time taken to different institutions / services – 86%

of the potential market in urban areas are within an hour of their nearest bank branch or

mobile bank and 84% are within an hour of any other financial institution office

TIME OF TRAVEL TO NEAREST INSTITUTION: URBAN (Salaried adults 16+, Do not have a funeral policy)

BANK BRANCH OR MOBILE BANK ANY OTHER FINANCIAL INSTITUTION OFFICE

14%

37%

21%

11%

4%

3%

1%

2%

6%

0% 20% 40% 60%

Less than 10 minutes

11 to 20 minutes

21 to 30 minutes

31 minutes to an 1 hour

1 hour to 1h 30 minutes

1h 30 minutes to 2 hours

2 hours to 3 hours

More than 3 hours

N/A

17%

38%

22%

10%

4%

2%

3%

2%

3%

0% 20% 40% 60%


11 to 20 minutes

21 to 30 minutes




2 hours to 3 hours

More than 3 hours

N/A


Never travels there /

Does not know where it is



49 D

RA

FT

The potential market in rural areas has to travel further to reach their nearest

bank branch, mobile branch or other financial institution office

TIME OF TRAVEL TO NEAREST INSTITUTION: RURAL (Salaried adults 16+, Do not have a funeral policy)

BANK BRANCH OR MOBILE BANK ANY OTHER FINANCIAL INSTITUTION OFFICE

3%

1%

4%

18%

17%

8%

11%

9%

29%

0% 20% 40% 60%


11 to 20 minutes

21 to 30 minutes




2 hours to 3 hours

More than 3 hours

N/A

4%

2%

1%

18%

17%

9%

10%

11%

28%

0% 20% 40% 60%


11 to 20 minutes

21 to 30 minutes




2 hours to 3 hours

More than 3 hours

N/A






50 D

RA

FT

Funeral policy applications and claims must be done at a branch. There are branches

located in Maputo, Nampula and Tete. Those individuals in the potential market not living

in those branches are considered to be unable to access the product

Source: Institution website

MOZAMBIQUE PROVINCES

Cabo

Delgado Niassa

Nampula

Zambezia

Tete

Sofala

Gaza Inhambane

Manica

Maputo

Cidade

Maputo

Provincia

51 D

RA

FT

Trust



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

52 D

RA

FT


organisations. Around one in ten adults in the potential markets disagree with the

statement “Their brokers or representatives are trustworthy and knowledgeable”

OVERALL PERCEPTION OF INSURANCE ORGANISATIONS (Salaried adults 16+, Do not have a funeral policy)

23%

10%

31%

21%

12%

16%

17%

8%

26%

10%

13%

30%

7%

11%

23%

6%

13%

17%

14%

16%

27%

8%

32%

23%

9%

28%

22%

23%

22%

21%

24%

24%

22%

22%

22%

21%

19%

22%

22%

45%

44%

41%

44%

47%

46%

45%

44%

44%

37%

45%

40%

42%

0% 20% 40% 60% 80% 100%















17%

13%

20%

16%

5%

4%

12%

5%

14%

12%

8%

16%

1%

14%

19%

3%

6%

19%

14%

9%

15%

12%

25%

17%

6%

22%

39%

32%

38%

36%

38%

35%

37%

44%

35%

37%

35%

38%

40%

30%

36%

39%

41%

38%

46%

42%

36%

38%

26%

39%

40%

37%

0% 20% 40% 60% 80% 100%

URBAN RURAL

53 D

RA

FT

Awareness



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

54 D

RA

FT

When individuals were asked why they don’t have any insurance (not

necessarily funeral-related), the majority cited “have never thought about it”

followed by “has not heard about it”

REASONS FOR NOT HAVING ANY INSURANCE (Salaried adults 16+, Do not have a funeral policy)

1%

1%

2%

2%

3%

3%

4%

4%

9%

12%

12%

20%

28%

Using insurance brings bad things or problems onto you

Does not know


It is not good value for money


The insurance company will not cover my goods /assets *





Cannot afford it





Note: Reponses with less than 1% for both segments are not shown on the chart

* … because they have too little value

URBAN RURAL

4%

2%

10%

1%

9%

2%

5%

17%

9%

32%

32%

40%

55 D

RA

FT

When asked why they haven’t made provisions for a funeral, the majority

cited “never thought about it” as their top reason

REASONS FOR NOT HAVING FUNERAL COVER PROVISION (Salaried adults 16+, Do not have a funeral policy)

1%

9%

15%

20%

54%

Other

Do not know

I did not know I could do it

Have thought about it but cannot afford it

Never thought about it

URBAN RURAL

4%

8%

30%

33%

48%


56 D

RA

FT

Awareness of financial terms such as ‘insurance’ and ‘instalment’ is higher

for the potential market in urban areas than in rural areas

60%

38%

24%

20%

16%

42%

0%

20%

40%

60%

80%

100%

Urban Rural

Heard of this and know what this means Heard of this but does not know what it means Never heard of this

39%

23%

24%

26%

37%

51%

0%

20%

40%

60%

80%

100%

Urban Rural

“Insurance” “Instalment”

AWARENESS / KNOWLEDGE OF FINANCIAL TERMS (Salaried adults 16+, Do not have a funeral policy)


Note: ‘No response’ is not included in the chart

57 D

RA

FT

We can use these indicators to populate a frontier



AGE

• Minimum legal

age to obtain the

product is 16

• Maximum age is

the age of

retirement (65 for

men and 60 for

women)

DOCUMENTATION

• Personal

identification such

as an identity

card, national

registration card

or passport

BANK ACCOUNT

• Require a bank

account to access

the product

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims are done

at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

58 D

RA

FT

TBD – Waiting on product specs for affordability

Total market

Sole decision

maker 16+,

Salaried urban

Has a funeral policy

Does not have a funeral policy

Does not have access to the

product

Has access to the product but does

not use it Potential users

Salaried urban

698 620

Salaried rural

353 823

Salaried urban

119 087

Salaried rural

41 476

Salaried urban

579 533

Salaried rural

312 347 Market

enablement zone

Market development

zone

SE: xx

SR: xx

SE: xx

SR: xx

33 123

Does not understand term “insurance”

Physical access No branch in province

Cannot afford

No identification card or passport

Does not want the product

xxxx

xxxx

No bank account


* Disagree with the statement “Their brokers or representatives are trustworthy and knowledgeable”

134 725

xxxx

232 542

230 391

29 872 Out of age range

Salaried

urban

59 658

xxxx

xxxx

163 962

xxxx

209 517

195 006

16 037

Salaried

rural

Does not trust insurance organ. * 45 779 38 724

59 D

RA

FT

TBD


ACCESS STRAND FOR PAYROLL FUNERAL POLICY

60 D

RA

FT

195 836

385 641

112 168

4 976

You make the decisions alone You make the decision in consultation with your partner or spouse

You are consulted by your partner or spouse You are not involved in decision making

100 008

213 759

30 041

10 015

In reality, not every individual will purchase the product – it does, after all, provide cover

for the household. No household head filter is available in the survey but we can restrict

the analysis to those adults who claim to be the sole decision maker in their household*

SALARIED URBAN Total segment: 698 620

SALARIED RURAL Total segment: 353 823

(85 observations) (32 observations)


DECISION MAKING STATUS IN THE HOUSEHOLDS (Adults 16+)

61 D

RA

FT

TBD


ACCESS STRAND FOR PAYROLL FUNERAL POLICY

(Sole decision makers)

62 D

RA

FT

A stand-alone funeral policy product from a different well-known insurance

company is outlined below

Basic product description

Stand-alone funeral policy product

Source: Discussions with insurance company

* The company is currently in contact with Mkesh to establish an agreement and expect to have it working in early 2016

** There is one branch located in Maputo City

Premiums and cover

Collection of premiums: Bank debit order, M-Pesa*, cash deposit at the branch**, cash

deposit at a bank and send through proof of payment

Premium options: Monthly, quarterly, bi-annual, annual

Minimum premium per person covered: 142.50 MT

Grace period before policy lapses: 2 months

Covers Main Member, Spouse, and 5 Children from 0 to 21 years old

Minimum and maximum amounts of cover offered: Min MT 15,000 and Max MT 50,000

Waiting period for claiming: 3 months

Marketing

Advertising via radio, television, newsprint and internet

Advertised in Portuguese

Client requirements

Personal identification document such as ID, passport, drivers license or voters card

Minimum age 18, maximum age 65

Does not need to have a bank account

Does not need to be employed

Channels

Take out the policy via agents or at the branch**

Application forms can be submitted via fax, post , email or at the branch (not

telephonically)

Can make a claim via email, post or physically going to a branch

63 D

RA

FT


Define the total market: This product is a stand-alone funeral policy and

there are no employment requirements


by David Porteous

Total market

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

64 D

RA

FT


Define the current market


by David Porteous

Total market

All adults 16+

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone 14 431 915

65 D

RA

FT

Just more than 3% of the total market have a formal funeral insurance product or are

making provisions to cover the expenses of a funeral, either through personal funeral

insurance or through funeral insurance covered by the employer

DEFINING THE CURRENT MARKET (Adults 16+)

FORMAL INSURANCE

PRODUCTS

PROVISIONS MADE FOR

FUNERAL


Note: Formal insurance products from Q9.1 and provisions for funeral from Q9.6

35 576

98 886



302 302

131 380



66 D

RA

FT


Identify those in the market redistribution zone - There are no indicators available in the survey

data relating to poverty and deprivation, therefore no redistribution zone has been identified


by David Porteous

Total market

All adults 16+

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

470 759

13 961 156

14 431 915

67 D

RA

FT


Explore the potential market


by David Porteous

Total market

All adults 16+

Currently has /

uses the product

Does not have /

use the product

Does not have

access to the

product

Too poor

Excluded by

default

Excluded by

design

Has access to the

product but does

not use it

Does not want the

product

Potential users

Market

enablement

zone

Market

redistribution

zone

Market

development

zone

0

14 431 915

470 759

13 961 156

68 D

RA

FT

What would an individual need to apply for this funeral policy?



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank

• Premium options:

Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch

• Can take out the

policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

69 D

RA

FT

Age



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

70 D

RA

FT


16 - 17 8%

18 - 34 46%

35 - 65 39%

66 + 4%

Unspecified 3%

The funeral policy product is only offered to individuals between the ages of

18 to 65 inclusive

AGE (Adults 16+, Do not have a funeral policy)

71 D

RA

FT

Documentation



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

72 D

RA

FT

Half of the potential market (adults without a funeral policy) have an identity

document or passport to use as identification when applying for the policy


DOCUMENTS HAVE IN OWN NAME (Adults 16+, Do not have a funeral policy)

1%

2%

3%

4%

5%

49%

50%

Salary or payslip

Title deed of house / building

Water bill

Passport

The electricity bill

None of the above

Identity document (BI / DIRE)

73 D

RA

FT

Payment method



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

74 D

RA

FT

Instalments can be paid via debit order from a customer’s bank account, from a

customer’s mobile money account, with a cash deposit at the institution branch

located in Maputo City, or with a cash deposit at any bank branch

INSTALMENT REPAYMENT METHODS (Adults 16+, Do not have a funeral policy)

BANK ACCOUNT STATUS PERSONALLY USE MOBILE

BANKING SERVICE *


* Cell phone usage statement: “You have a Mkesh or Mpesa account” / Registered user of a mobile money service

** Never travels there / Does not know where it is

Have a bank

account 13%

Don't have a bank

account 87%

Yes 2%

No 98%

LIVE IN MAPUTO CITY LIVE WITHIN AN HOUR OF

A BANK BRANCH

Yes 6%

No 94%

Within an hour 35%

An hour or more

27%

N/A ** 38%

75 D

RA

FT

Affordability



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

76 D

RA

FT




77 D

RA

FT

PERSONAL MONTHLY INCOME (Adults 16+, Do not have a funeral policy)

13%

2%

65%

14%

1%

0%

0%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Don't know

No income

Less than 5 000 MT

5 001 - 25 000 MT

25 001 - 50 000 MT

50 001 - 100 000 MT

100 001 MT or more

Refused


78 D

RA

FT

Physical access



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

79 D

RA

FT

There is currently only one branch of the institution, located in Maputo City. However, the policy can

also be taken out via agents and the application forms can be submitted via fax, post or email (as

well as at the branch). No physical access constraint has therefore been included in the analysis

MOZAMBIQUE PROVINCES

Cabo

Delgado Niassa

Nampula

Zambezia

Tete

Sofala

Gaza Inhambane

Manica

Maputo

Cidade

Maputo

Provincia


80 D

RA

FT

Trust



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

81 D

RA

FT


organisations. Around 2% of adults in the potential markets disagree with the

statement “Their brokers or representatives are trustworthy and knowledgeable”

OVERALL PERCEPTION OF INSURANCE ORGANISATIONS (Adults 16+, Do not have a funeral policy)

9%

9%

10%

4%

4%

3%

3%

3%

7%

10%

5%

7%

3%

3%

6%

3%

6%

4%

3%

6%

7%

2%

9%

7%

4%

9%

27%

27%

25%

27%

29%

30%

28%

27%

28%

27%

25%

27%

28%

61%

58%

62%

63%

64%

63%

63%

63%

63%

54%

62%

62%

60%

0% 20% 40% 60% 80% 100%
















82 D

RA

FT

Awareness



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

83 D

RA

FT

Only 13% of the potential market know what insurance is and 7% know what

instalments are

AWARENESS / KNOWLEDGE OF FINANCIAL TERMS (Adults 16+, Do not have a funeral policy)

Heard of this and know

what this means

Heard of this but does

not know what it means Never heard of this

Bank 54% 30% 15%

Instalments 7% 12% 80%

Insurance 13% 16% 70%

Mobile bank 8% 16% 76%

Savings account 19% 20% 60%


Note: ‘No response’ is not included in the chart

84 D

RA

FT

We can use these indicators to populate a frontier



AGE

Minimum age 18,

maximum age 65

DOCUMENTATION

Personal

identification such

as an identity

card, passport,

drivers license or

voters card

PAYMENT

METHOD

• Collection of

premiums done

via debit order,

mobile banking or

deposit at a bank


Monthly,

quarterly, bi-

annual, annual

AFFORDABILITY

• Must be able to

afford premiums

PHYSICAL

ACCESS


claims can be

done via email,

post or physically

going to a branch


policy via agents

or at the branch

TRUST


levels of trust in

formal financial

institutions

AWARENESS

• Awareness of

financial

institutions and

financial products

and services

available to

consumers

85 D

RA

FT



86 D

RA

FT

Medical insurance product – in progress

Exploring market opportunities for insurance in...

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