Access to insurance products in Namibia. Prepared for FinMark Trust. March Basic product description

10 

Loading....

Loading....

Loading....

Loading....

Loading....

Full text

(1)

Access to insurance products in Namibia Prepared for FinMark Trust

March 2007 2

Funeral insurance

Basic product features Basic product features

nProduct name: Funeral Care (offered by Old Mutual)

nThree categories: individual, family (incl. spouse and unlimited nunmber of children), and parent (where policy holder takes cover for one parent) – this analysis is based on the category for family

nMinimum cover of N$5,000

nPayout usually within 48 hours or sooner

nMinimum premium of N$50 per month – standard cover

nMarketed via traditional methods (broker and agent) as well as direct marketing

Basic product description

Client requirementsrequirementsClient

nProof of identity nProof of address nBanked or proof of income

nMinimum and maximum age at entry is 16 and 59 respectively Sales channelsSales channels

Premium collectioncollectionPremium

nPremiums paid monthly nDebit order or stop order

(2)

3

Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor” by David Porteous Currently has /

uses the productuses the productCurrently has /

Does not have / use the productDoes not have / use the product

Does not have access to the

product Does not have

access to the product

Unaware Unaware No accessNo access

Can’t affordCan’t afford

Market redistribution zone Market development zone

Has access to the product but does

not use it Has access to the product but does

not use it

Does not want the product Does not want the

product Potential usersPotential users

Market enablement zone No ID or passportNo ID or passport 474,903 154,791 320,112 50,544 269,568 62,127 207,441 20,007 138,996 134,784 5265 103,194 35,802 50,544 Total marketTotal market

Too poorToo poor

Unbanked or don’t receive salary/wagereceive salary/wageUnbanked or don’t

14,742

Namibia access frontier: funeral insurance based on household

heads only (scaled up approximation)

60 and over60 and over 27,378

Uncertain cash flowUncertain cash flow 82,134

Approximation: CIA World Fact Book: Estimated adult population ( 15+) = 1,263,283; represented by 1,200 weighted respondents in survey

4

Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor” by David Porteous Currently has /

uses the productuses the productCurrently has /

Does not have / use the productDoes not have / use the product

Does not have access to the

product Does not have

access to the product

Unaware Unaware No accessNo access

Can’t affordCan’t afford

Market redistribution zone Market development zone

Has access to the product but does

not use it Has access to the product but does

not use it

Does not want the product Does not want the

product Potential usersPotential users

Market enablement

zone No ID or passportNo ID or passport

Total marketTotal market

Too poorToo poor

Unbanked or don’t receive salary/wagereceive salary/wageUnbanked or don’t

Namibia access frontier: funeral insurance based on household

heads only (percentage of total market)

60 and over60 and over

Uncertain cash flowUncertain cash flow 100% 33% 67% 11% 57% 13% 44% 4% 29% 28% 1% 22% 8% 11% 3% 6% 17%

(3)

5

The access frontier for funeral insurance

Total marketTotal market

n Derived from Finscope Namibia 2004 – adults (16+), N = 1200 n This is considered a household product – analysis based on household

heads only

No accessNo access n Associate the statement “they have too few branches” or “Too far from where I live, work or usually go to” with insurers; AND have no access to phone, fax, email, or internet; AND cannot be reached by postal mail

UnawareUnaware

Too poorToo poor n Respondent or household has gone without enough food to eat “always”or “many times” in the past 12 months Currently has /

uses the productuses the productCurrently has /

n Answered yes to having any of these products now – insurance company funeral policy, burial/funeral policy with other registered institution, employer burial/funeral scheme, funeral cover through church or trade union

n Formal education level did not reach high school AND have no experience with any formal* risk insurance products only (excluding savings products sold by the insurance industry such as endowments, pensions, education policies, etc). Also if the respondents indicated that they do not know how to go about buying funeral cover (reasons no funeral or burial cover)

* Such as from an insurance company, other registered organisation, church, employer, etc. Excludes burial societies, funeral parlours, etc.

6

The access frontier for funeral insurance

No ID or passportNo ID or passport n Identification required to take out policy

60 and over60 and over n Cannot take funeral cover if aged 60 or more

Unbanked or don’t receive salary/wage Unbanked or don’t receive salary/wage

n Banking details or salary reference no. required to take out policy (payment via debit or stop order only)

Can’t affordCan’t afford

n Based on assumption that 5% of household income can be spent on the product n Minimum total monthly income set at N$1 000 (min. premium at Old Mutual is

N$50)

n Those who refused to answer were grouped with the N$1 000 or more income bracket. Those who were uncertain were grouped with the less than N$1 000 income bracket

Uncertain cash flow Uncertain cash

flow

n Respondent or household has gone without a cash income “Always” or “Many times” in the past 12 months

Does not want the product Does not want the

product

n Respondent answered “Don’t want it” when asked why no burial or funeral cover

(4)

7

The access frontier for funeral insurance in Namibia

43.7%

32.6%

3.1%

7.5% 13.1%

Have now and use Don’t want Have access but don’t use Not too poor but cannot access Too poor

Market redistribution zone Market enablement zone Current market Market development zone

Access frontier for funeral insurance: Household heads

8

Life insurance

Basic product features Basic product features

nName: Life Plan (offered by Old Mutual) nWhole life

nMinimum premium of N$100 per month

nMay require a medical report (depends on sum assured) nExclusions: suicide and self-inflicted injuries

nMarketed via agents and brokers, no direct marketing Basic product description

Client requirementsrequirementsClient

nProof of identity nProof of address nBanked or proof of income

nMinimum and maximum age at entry is 16 and 64 respectively Sales channelsSales channels

Premium collectioncollectionPremium

nPremiums paid monthly nDebit order or stop order

(5)

9

Namibia access frontier: life insurance (scaled up approximation)

Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor” by David Porteous Currently has /

uses the productuses the productCurrently has /

Does not have / use the productDoes not have / use the product

Does not have access to the

product Does not have

access to the product

UnawareUnaware No accessNo access

Can’t affordCan’t afford

Market redistribution zone Market development zone

Has access to the product but does

not use it Has access to the product but does

not use it Market enablement zone No ID or passportNo ID or passport 1,263,600 174,798 1,088,802 96,876 991,926 153,738 838,188 52,650 255,879 793,962 114,777 421,200 96,876 Total marketTotal market

Too poorToo poor

Uncertain cash flowUncertain cash flow 65 and over65 and over 25,272 Unbanked or no

salary/wage Unbanked or no

salary/wage

245,349 Does not want the

product Does not want the

product Potential usersPotential users

Approximation: CIA World Fact Book: Estimated adult population ( 15+) = 1,263,283; represented by 1,200 weighted respondents in survey

10

Namibia access frontier: life insurance (percentage of total market)

Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor” by David Porteous Currently has /

uses the productuses the productCurrently has /

Does not have / use the productDoes not have / use the product

Does not have access to the

product Does not have

access to the product

UnawareUnaware No accessNo access

Can’t affordCan’t afford

Market redistribution zone Market development zone

Has access to the product but does

not use it Has access to the product but does

not use it Market enablement zone No ID or passportNo ID or passport 100% 14% 86% 8% 79% 12% 66% 4% 20% 63% 9% 33% 8% Total marketTotal market

Too poorToo poor

Uncertain cash flowUncertain cash flow 65 and over65 and over 2% Unbanked or don’t receive salary/wagereceive salary/wageUnbanked or don’t

19% Does not want the

product Does not want the

product Potential usersPotential users

(6)

11

The access frontier for life insurance

Total marketTotal market

n Derived from Finscope Namibia 2004 – adults (16+), N = 1200

No accessNo access Too poorToo poor

Can’t affordCan’t afford n Based on assumption that 5% of personal income can be spent on the product n Minimum total monthly income set at N$2 000 (Minimum contribution at

Old Mutual is N$100)

n Those who refused to answer were grouped with the N$2 000 or more income bracket. Those who were uncertain were grouped with the less than N$2 000 income bracket

Currently has / uses the productuses the productCurrently has /

n Answered yes to having any of the following products now – life assurance policy, life cover, or lump sum in case of death from employer

n Respondent or household has gone without enough food to eat “always” or “many times” in the past 12 months

n Associate the statement “they have too few branches” or “Too far from where I live, work or usually go to” with insurers; AND have no access to phone, fax, email, or internet; AND cannot be reached by postal mail

12

The access frontier for life insurance

No ID or passportNo ID or passport

n Identification required to take out policy

65 and over65 and over n Cannot take life cover aged 65 or more

Unbanked or don’t receive salary/wage Unbanked or don’t receive salary/wage

n Banking details or salary reference no. required to take out policy (payment via debit or stop order only)

Uncertain cash flow Uncertain cash

flow UnawareUnaware

n Formal education level did not reach high school AND have no experience with any formal* risk insurance products only (excluding savings products sold by the insurance industry such as endowments, pensions, education policies, etc)

n Respondent or household has gone without a cash income “Always” or “Many times” in the past 12 months

(7)

13

66.3%

13.8% 7.7% 12.2%

Have now and use Have access but don’t use Not too poor but cannot access Too poor

The access frontier for life insurance in Namibia

Market redistribution zone Market enablement zone Current market Market development zone

Access frontier for life insurance

14

Endowments

Basic product features Basic product features

nName: Group Schemes Investment Plan (offered by Old Mutual) nMinimum term of 10 years

nMinimum premium of N$75 per month

nMarketed via brokers and agents as well as direct marketing Basic product description

Client requirementsrequirementsClient

nProof of identity nProof of address nBanked or proof of income

nMinimum and maximum age at entry is 16 and 64 respectively Sales channelsSales channels

Premium collectioncollectionPremium

nPremiums paid monthly nDebit order or stop order

(8)

15

Namibia access frontier: endowments (scaled up approximation)

Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor” by David Porteous Currently has /

uses the productuses the productCurrently has /

Does not have / use the productDoes not have / use the product

Does not have access to the

product Does not have

access to the product

UnawareUnaware No accessNo access

Can’t affordCan’t afford

Market redistribution zone Market development zone

Has access to the product but does

not use it Has access to the product but does

not use it Market enablement zone No ID or passportNo ID or passport 1,263,600 92,664 1,170,936 197,964 972,972 159,003 813,969 52,650 247,455 752,895 111,618 421,200 197,964 Total marketTotal market

Too poorToo poor

Unbanked or don’t receive salary/wagereceive salary/wageUnbanked or don’t Uncertain cash flowUncertain cash flow

254,826 Does not want the

product Does not want the

product Potential usersPotential users

Approximation: CIA World Fact Book: Estimated adult population ( 15+) = 1,263,283; represented by 1,200 weighted respondents in survey

16

Namibia access frontier: endowments (percentage of total market)

Based on a paper entitled “The Access Frontier as an Approach and Tool in Making Markets Work for the Poor” by David Porteous Currently has /

uses the productuses the productCurrently has /

Does not have / use the productDoes not have / use the product

Does not have access to the

product Does not have

access to the product

UnawareUnaware No accessNo access

Can’t affordCan’t afford

Market redistribution zone Market development zone

Has access to the product but does

not use it Has access to the product but does

not use it Market enablement zone No ID or passportNo ID or passport 100% 7% 93% 16% 77% 13% 64% 4% 20% 60% 9% 33% 16% Total marketTotal market

Too poorToo poor

Unbanked or don’t receive salary/wagereceive salary/wageUnbanked or don’t Uncertain cash flowUncertain cash flow

20% Does not want the

product Does not want the

product Potential usersPotential users

(9)

17

The access frontier for endowments

Total marketTotal market n Derived from Finscope Namibia 2004 – adults (16+), N = 1200

No accessNo access

UnawareUnaware Too poorToo poor Currently has / uses the productuses the productCurrently has /

n Answered yes to having the following products now: endowment or education policy

n Associate the statement “they have too few branches” or “Too far from where I live, work or usually go to” with insurers; AND have no access to phone, fax, email, or internet; AND cannot be reached by postal mail

n Formal education level did not reach high school AND have no experience with any formal* insurance products

* Such as from an insurance company, other registered organisation, church, employer, etc. Excludes burial societies, funeral parlours, etc. – Q30 n Respondent or household has gone without enough food to eat “always”

or “many times” in the past 12 months

18

The access frontier for endowments

No ID or passportNo ID or passport

n Identification required to take out policy

Unbanked or don’t receive salary/wage Unbanked or don’t receive salary/wage

n Banking details or salary reference no. required to take out policy (payment via debit or stop order only)

Uncertain cash flow Uncertain cash

flow

Can’t affordCan’t afford n Based on assumption that 5% of personal income can be spent on the product n Minimum total monthly income set at N$1 500 (Minimum investment

premium at Old Mutual is N$75)

n Those who refused to answer were grouped with the N$1 500 or more income bracket. Those who were uncertain were grouped with the less than N$1 500 income bracket

n Respondent or household has gone without a cash income “Always” or “Many times” in the past 12 months

(10)

19

64.4%

7.3% 15.7% 12.6%

Have now and use Have access but don’t use Not too poor but cannot access Too poor

The access frontier for endowment policies in Namibia

Market redistribution zone Market enablement zone Current market Market development zone

Figure

Updating...

References

Updating...

Related subjects :