Women’s Market for Insurance Working Group

Women’s Market for Insurance Working GroupCall 7 – Minutes

Implementing with InsurersSeptember 6, 2017

RECORDING LINK: https://recordings.join.me/rV8L_4FeU0q9vcXryooZmQ

PARTICIPANTS:Hilary Nichols (GBA) Maria Belen Sanchez Valdivieso

(Banco Pichincha, Ecuador)Vanessa Van Landingham (GBA) Miguel Angel (BancoEstado, Chile)Rebecca Ruf (GBA) Michael (Centenario, Uganda)Inez Murray (GBA) Doreen Ratemo (Chase Bank, Kenya)Michael J. McCord (MicroInsurance Centre)

Kaylene Alvarez (IFC)

Mariah Mateo Sarpong (MicroInsurance Centre)

Michal Matul (AXA, France)

Katie Biese (MicroInsurance Centre)

? (BAC San Jose)

Mazen Nimri (Jordan Insurance Company, Jordan)

Others?

Mariana Torres de Urquidi (Aterna, Mexico)

AGENDA1) Technical time – make sure everyone is connected (5 minutes)2) Welcome, intro, follow up Session 5, news items, member news

(15 minutes)3) Implementing with Insurers

1) Intro to session content – Michael J. McCord (15 minutes)2) Structured Q&A with two insurance industry companies (50

minutes) – Mazen Nimri (JIC, Jordan) and Mariana Torres de Urquidi (Aterna, Mexico) and GBA members

4) Wrap-up and next steps (10 minutes)

MINUTES:

Mariah Mateo SarpongIn the News: Insurance for women – News

- Inclusive insurance and the sustainable development goals: publication released in August by GIZ. Discusses

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Women’s Market for Insurance Working Group

specifically how insurance contributes to SDG 5, which is gender equality and empowerment of women and girls. How insurance can help achieve this. Two of the authors include Michael J. McCord and Katie Biese

- Michael was at an APEC high-level meeting on health last week, and spoke to this topic of how insurance contributes to women’s empowerment and gender equality

- Document available on the Vault

Members:Member News - updates/achievements during the prior month

- Centenary (Michael): o has been nominated for several awards at the upcoming

2017 Digital Impact Awards Africa, including Best Financial Inclusion Product/Service for its Centenary SupaWoman Women’s Market program.

o Started in 2015, Cente SupaWoman is a special savings account designed to meet women’s specific banking needs. Through the SupaWoman Club, the account includes benefits like access to financial literacy training, health insurance at discounted premiums and business advisory services.

o Congratulations to them!

Michael J. McCord Implementing with insurers

- Review back to the overall process for insurance delivery (slide 6): we want to look now at strategic partnerships that are specific for women.

o One of our objectives for this group was to come up with recommendations for insurers and banks can better serve women clients

- Models for delivering insurance (slide 7): o Two models that we have looked at. o Partnership model – basically bancassurance. The banks

and insurers are not legally linked. Creates competition among insurers to have better products.

o Holding company / subsidiary model. A major holding company will have both an insurer and a bank. This creates a very tight linkage. If the holding company policy is really focused on insurance for women, and is an important

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objective, then there is more potential for making it work. There is pressure for both sides.

- Partnership model (slide 8): o 3 entities… insurer, intermediary, end clientso Some partnerships may have a second intermediary

playing a technical service provider roleo Trying to be clear about the roles of each party:

Insurer core responsibility is carrying the risk. Also working with regulators. Often the product design as well

“Win” – have some profitability If there is a technical service provider (TSP), they

may take on the product development, servicing and sales, taking on more responsibility away from the insurer

End distribution channel – can be a variety of organizations that work with end clients.

“Win” – additional income stream; as well as all the things we’ve been talking about – attraction of new clients, retention of clients, competitive advantage, etc.

End clients – this is the focus of all of us – how do we get good products to them. They are the ones who are paying for the products and services and should receive good benefits

“Win” – good risk management and other services

o Question (Hilary): in what case would you recommend using a TSP or not?

TSPs perform a wide array of services, and can take roles away from insurers and banks. If banks feel they have capacity and alignment of objectives with an insurer, can go direct to an insurer

If the bank doesn’t have time to go out and do a lot of the development and training, and other capacity that is necessary, they can outsource it to these TSPs.

Depends on your level of interest and involvement in the product

Costs should also be considered – make sure there is some monetary benefit for all parties. A TSP should be able to join the chain without raising the overall price to the consumer.

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- Building a successful relationship (slide 9): o Is very close to building a relationship in our personal lives,

such as a marriage.o Find the right partner: Need to make sure we are aligned in

our vision. Sometimes they are hard to find, and we need to be very careful in selecting

How do they SHOW that they are interested in the women’s market, not just talk about it?

o Proposal: What about the proposal? In insurance, we call this the term sheet. Laying out clearly the definition of the product and service. Need to be specific here with considerations for the women’s market

o Marriage agreement – MoU (memorandum of understanding) - this outlines the overall partnership agreement. What the roles are, specifically who does what, how you will take on various issues

o Job list: Understand roles and responsibilities o Scheduling ‘dates’ to keep the relationship maintained –

what is the experiences of customers? What is the experiences of the partners?

- “Jobs lists” (slide 10): o Flexible depending on the products and partnerso The list will help think through the various roles that will

need to be taken on o In particular, need to focus the roles on understanding the

clients – so these roles will likely go to the distribution channel, as they closest to the clients

o Helpful to think about when creating relationships, so that you are very clear about responsibilities

Mazen Nimri, Deputy General Manager, Life and Medical Department, Jordan Insurance Company, JordanMariana Torres de Urquidi, CEO, Aterna, Mexico (Microinsurance broker)Q&A with insurance industry companies

- Michael: Two extraordinary people. Mazen is behind the Caregiver product that we have discussed before. He came in and took over the product and really created something that has responded to women.

o Mazen Nimri (MN): honor to be here. Joint teamwork is what made success over the past 10 years. Was a great effort between Jordan Insurance Company (JIC) and the microfinance bank. Started as a small business with about 2000 members. Now there are 300-400K members. They

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have an excellent partnership model. The sky is the limit even if they are a small company in a small country. Glad to be here to share the experience.

- Michael: Mariana Torres – don’t know anyone in the world who knows her clients better. Aterna is a joint venture between Compartamos and Interproteccion (another service provider)

o Mariana Torres de Urquidi (MTU): active in Mexico, Peru, Guatemala. Specializing in microinsurance, and a lot of work specific on designing for women. They have good relationships with insurance companies, as an intermediary they see the whole picture and have identified ways to make the whole process and product better, with the end result being a great experience for the client.

Q1: What are the costs and benefits associated with partnerships?

- MTU: The bank knows everything about their clients; o MUST select a partnership that will reflect that. Even if

everything else is there – regulations, processes, etc., if the focus on the client is not there the partnership will break. Have to make the product tangible for the clients. Now with a program that they have they are offering a variety of products – hospital cash, cancer coverage, covering children. They have started with just life and evolved over the last 14 years. Most important thing their women clients value is their children – they have designed something to offer them. Not everything has to be offered by an insurance company; also partnering with an NGO that works with children. Thus, the key ingredient is having a real interest (strategic task) in focusing on this market segment.

- Are there specific costs for focusing on women’s market? - MTU: There are underwriting (actuarial) costs that the insurer

faces for women. It’s an effort to make the insurers realize that there is a business case in this specific segment. Have to be willing to have some high costs / investment to start out. It will not necessarily mean really high claims (e.g. for breast cancer), but also on training clients. Insurers also want to have more exclusions – have to work with them to try to reduce these and keep them SUAVE.

- We need complementary, innovative partners. How do you manage the costs and benefits of this approach?

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- MN: It’s really a story. When their MFI partner first approached them, they didn’t know what to expect…they seemed to have lots of crazy ideas that wouldn’t work. Did lots of research and focus groups, especially with women. Reactions were extremely positive for so many ideas, giving encouragement to move ahead

o In 2006, started with simple life insurance product, and have added many additional benefits since them

o When they started profitability was not the primary focus. The MFI was willing to accept and amend the benefits based on experience of the insurer. Transparent and open partnership. Over time they found an equilibrium premium.

o Nobody made a huge profit, but had same mindset towards well-being of the women.

o Both sides were coherent in processes and services in tailoring towards women

o Changes overtime: incorporated family members coverage (spouses)

o Another important characteristic was listening to what the end client and what they want. Doing frequent research, even if the product is successful. Don’t take it for granted that product will remain successful over time…always looking to improve. This is why the product is so different from 10 years ago.

o Has the evolution been an important component to the business case?

o MN: Yes, when started with simple term life. Upon death of borrower, they paid just the loan amount.

Then started paying the additional amount to beneficiaries – effect was enormous. Word of mouth spread among the people and this was extremely powerful. MFI became seen as a positive contributor to a women’s well-being. Family was receiving benefits – this was great marketing. Also, they started perceiving insurers as a positive entity. They never rejected any claims, underwriting is minimal. This built up trust

Then women began saying they don’t just want death benefits, they want living benefits. This is when they added hospital cash benefits.

Over time reduced death benefits but added on additional family members, for the same premium. For example, the woman has to leave work and go sit

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with her husband or child in the hospital, so she still gets compensated for that

o As you moved through the evolution, has this improved the business case for JIC?

MN: every time they launched something new, they would pilot for about 6 months to see if it works. So, they were always cautious, and monitor it closely to make sure that it will work. They lost money at some stages, but have managed to turn it around back to profitability because of the monitoring and adjustments

MN: there were some claims that technically wouldn’t have to be paid, but they did anyways in order to strengthen the relationship with the partner and the client

Q2: What are the key things banks should be looking for when reviewing proposals from potential insurance partners? (asked by Hilary on behalf of Hellen Tomusange, Centenary Bank)

- MTU: I have found that when evaluating, qualitative aspects are essential – these aspects are not often part of the proposal, so it is difficult to evaluate

o Strategic approach in terms of innovationo Focus on the women’s market – is this really their focus? o How much is the CEO involved in the initiative: how

important do they see it and are they active?o Administrative costs and support they are willing to put ino What do they think about the women’s market? Look at

their own employees and how they treat them. Similar to looking at how your boyfriend treats his mother.

- MN: Everything has to be simple. Pick a partner that has a sound history of honoring their claims. Overall reputation of the company is important. Solid team members and management. Flexibility to respond to the banks needs with minimal administration hurdles. Quick decision making (no long bureaucratic approvals). Good IT support system that can cater to your needs. Insurance company should give overwhelming services.

o Two types of partnerships – in Jordan there is an insurance company that owns a bank. But the bank prefers to work with JIC because they offer better service and do better and settling claims.

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o Look for a mature relationship – equal partners, not a ‘winner’

o Flexibility to deal with gray areas.- To summarize: Qualitative and quantitative aspects, dedicated

team, focus on the channel, flexibility - What are 2 things I should ask an insurer that would

really tell me the truth about what is happening. What is it, that as a bank would get us honesty particularly on the qualitative issues?

o MTU: the story always does seem to be nice, like they are saying what you want to hear. What is helpful is asking for examples from their operations. What is the claim that you have paid the most in the last two months, and why is this happening? Try to get concrete information from them to show that they are really focused. Narrow in on specific questions on the process…go into examples and daily aspects of the business.

o MN: What level of service am I expecting, and at what price? Need to look at the track record… annual report, see if they have solid operations. Ratings, reputation…talk to the other partners. Use multiple sources – don’t rely on one word from one person.

o MTU: Could you present me your team that works on developing new creative / innovative products (for women)? If they don’t already have a team ready for that, then they aren’t good at it yet.

Q3: What are some key lessons learned from successful and unsuccessful bank and insurance partnerships? What could have made it work?

- MTU: As the bank, we assumed we knew everything. We assumed we were the experts of the market, and we didn’t listen to the insurance company on some areas where they were right. When they launched the product in the pilot test – a simple disaster product; the things the insurer said were correct (claims were too high because of concentration risk). Have to acknowledge that no one partner knows everything…have to respect each other’s expertise.

o Another example: the insurer wasn’t willing to go to the field to understand what is happening in real life. Relied too much on data and numbers and actuarial info to make the product design decision.

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- How do we balance these things in practice? Are there rules of thumb to help us figure out when to listen to the insurer, and when to listen to the partner, etc.?

o MTU: each partner has to understand the role that they have to play. Listen to the management team in charge of the project. Be transparent. Once you choose a partnership, you have to trust each other and be able to delegate responsibilities.

o Do you use a grid like we showed before to help breakdown the relationship responsibilities?

MTU: yes…do have this written in black and white helps a lot. And be clear of the results and outputs

o Mazen, how do you make this differentiation? MN: it’s difficult to come up with an ultimate

solution. Always have to be compromising and just make sure that the other party understands your point of view…have to put all your cards on the table in order to ensure long term sustainability

Credible team members are crucial. These build trust. People who are motivated and committed

- So, we are looking at transparency, trust, balance of power, respect, educational phase that builds transparency and both sides understand the other point of view.

o MN: Yes, and the meeting of minds, so to speak, starts at the management and board level. If there is passion there it will trickle through.

Q4: What is needed to keep a partnership alive and vibrant and built around insurance products and services for women? One or two quick key points.

- MJM: We already mentioned clear roles, regular dates, monitoring. Anything else?

- MTU: Make the insurer be involved in the claims story – show the transformation in the life of the client, the social impact. Make them participate, and motivate them. Having a business case is also important. But if they have the experience of the end impact, it makes a difference in expectations for what that profit needs to look like. Go beyond the economics.

- Does the focus on women make it more difficult or easier to keep the relationship going?

- MTU: At first it is very challenging to be creative, but usually once they see the results they are motivated. As the women’s

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role in the world starts to grow and become important, it gives them prestige in the industry to be serving this segment. It’s a great experience because most of us who work with women have a special passion, and when we find an insurer that shares that it makes it easier. It’s a lot of work, and you always have to be focused on the monitoring and creativity…once you have it doesn’t mean it’s going to stay. (e.g. turnover of leadership).

- Mariana mentioned prestige for insurers…Mazen, do you find this to be the case? And what are two quick keys to keeping this relationship vibrant.

- MN: Never take your client for granted. Always stay on your tip toes and listen to what they want. In terms of reputation, both sides are very proud and promote each other as partners. Need to always be flexible and have the willingness to adapt to new changes and take risks together. Adjust your products to suit the end clients’ needs, and keep listening to them.

Michael J. McCordNext steps

- First, warm thank you to both Mazen and Mariana, on behalf of MIC and GBA

- “Homework”: Email populated KPI tool to facilitators; would like to have some members present their key findings as possible/willing

- Next session: “Revisiting the business case” - Vault: Added items to the Vault –

o Call 6 documentationo Updated KPI tools in Spanish and English o Inclusive insurance and the SDGso Bima Insight Survey 2016: The Consumers Shaping the

Future of Mobile Financial Services (link)o Green Delta Insurance - Annual Reports (link)o A Total Market Approach: Opportunities to Expand Your

Business with Diverse Customers – Prudential o A Total Market Approach: Winning with women and

multicultural consumers – Prudential - Next call: October 4th 10:00 am EDT.

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